New Delhi: Telecom operators need the federal government to refund enter tax credit score (ITC) of round Rs 35,000 crore, scale back levies and waive GST on licence charges and spectrum utilization within the upcoming Finances.
In accordance with pre-Finances suggestions of telecom business physique COAI, whose members embody Vodafone Thought, Bharti Airtel and Reliance Jio, the telecom sector desires the federal government to droop common service obligation fund (USOF), which financially helps rollout of telecom companies within the rural space, to scale back burden on the service suppliers.
“Refund unutilised ITC of Rs 35,000 crore of the business, which can’t be utilized within the close to future. The present market dynamics have led to the buildup of large ITC.
“The credit would further increase with the upcoming significant capital expenditure to further enhance customer experience and achieve the vision of Digital India,” COAI mentioned.
At current, licence charges paid by the telecom operators is calculated as 8 per cent of income earned from telecom companies, technically referred to as adjusted gross income (AGR).
The federal government has eliminated a number of income heads that had been a part of AGR in addition to abolished spectrum utilization costs (SUC) on radiowaves that will likely be bought sooner or later auctions as a part of the telecom reforms.
“We thank the Authorities for the current forward-looking structural and procedural reforms, which we imagine won’t solely convey stability and sustainability to the sector however will even facilitate the digital wants of the residents.
“The telecom industry needs investment in robust and reliable communication infrastructure to meet the rising demand for connectivity. There is an urgent need to reduce the burden of levies on the sector,” COAI Director Normal S P Kochhar mentioned.
The Mobile Operators Affiliation of India (COAI) urged the federal government to convey down licence charges from 3 per cent to 1 per cent and scale back SUC charge by 3 per cent on spectrum acquired in previous auctions.
“Prevailing license fee is 8 per cent of AGR, which includes a 5 per cent levy for USO Fund. The existing USO Fund corpus, which is more than Rs 59,000 crore, is sufficient to meet USO objectives for the next few years. Contribution towards USO can be suspended till the existing corpus is utilised,” COAI mentioned.
The business physique mentioned round 85 per cent of telecom gear within the nation is imported and fundamental customs responsibility (BCD) of 20 per cent is levied on them.
“Higher customs duty on telecom equipment is disrupting cost effectiveness for telecommunication companies. Exemption from BCD should be granted on telecom equipment. Also Read: Shares to purchase: HDFC Securities bullish on THIS inventory
“Till the time good quality equipment is available in India at affordable prices, customs duties for 4G/5G related network products, along with other related products, should be brought down to nil,” COAI mentioned. Additionally Learn: Aditya Birla Style acquires 51% stake in designer clothes model Masaba