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 Price range.
In response to pre-Price range suggestions of telecom trade physique COAI, whose members embrace Vodafone Concept, Bharti Airtel and Reliance Jio, the telecom sector needs the federal government to droop common service obligation fund (USOF), which financially helps rollout of telecom providers within the rural space, to scale back burden on the service suppliers.
“Refund unutilised ITC of Rs 35,000 crore of the industry, which cannot be utilized in the near future. The current market dynamics have led to the accumulation of massive ITC.
“The credit score would additional enhance with the upcoming important capital expenditure to additional improve buyer expertise and obtain the imaginative and prescient of Digital India,” COAI said.
At present, licence fees paid by the telecom operators is calculated as 8 per cent of revenue earned from telecom services, technically called adjusted gross revenue (AGR).
The government has removed several revenue heads that were part of AGR as well as abolished spectrum usage charges (SUC) on radiowaves that will be purchased in the future auctions as part of the telecom reforms.
“We thank the Authorities for the current forward-looking structural and procedural reforms, which we consider is not going to solely deliver stability and sustainability to the sector however may also 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 deliver down licence charges from 3 per cent to 1 per cent and scale back SUC price 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 trade 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.
“Until the time good high quality gear is accessible in India at reasonably priced costs, customs duties for 4G/5G associated community merchandise, together with different associated merchandise, ought to be introduced all the way down to nil,” COAI mentioned.