Telecom operators need the federal government to refund enter tax credit score (ITC) of round Rs 35,000 crore, cut back levies and waive GST on licence charges and spectrum utilization within the upcoming Budget.
According to pre-Budget suggestions of telecom trade physique COAI, whose members embody Vodafone Idea, 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 trade, which can’t be utilized within the close to future. The present market dynamics have led to the buildup of large 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 stated.
At current, licence charges paid by the telecom operators is calculated as eight per cent of income earned from telecom companies, technically known as adjusted gross income (AGR).
The authorities has eliminated a number of income heads that had been a part of AGR in addition to abolished spectrum utilization expenses (SUC) on radiowaves that shall be bought sooner or later auctions as a part of the telecom reforms.
“We thank the Government for the latest forward-looking structural and procedural reforms, which we imagine won’t solely deliver stability and sustainability to the sector however can 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 General S P Kochhar stated.
The Cellular Operators Association of India (COAI) urged the federal government to deliver down licence charges from three per cent to 1 per cent and cut back SUC charge by three 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 stated.
The trade physique stated round 85 per cent of telecom gear within the nation is imported and primary customs responsibility (BCD) of 20 per cent is levied on them.
“Higher customs responsibility on telecom gear is disrupting price effectiveness for telecommunication firms. Exemption from BCD must be granted on telecom gear.
“Till the time good high quality gear is out there in India at reasonably priced costs, customs duties for 4G/5G associated community merchandise, together with different associated merchandise, must be introduced right down to nil,” COAI stated.