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 Budget.
According to pre-Budget suggestions of telecom trade physique COAI, whose members embody Vodafone Idea, 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 companies within the rural space, to cut 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 huge 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 authorities has eliminated a number of income heads that have 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 is not going to solely deliver stability and sustainability to the sector however may 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 mentioned.
The Cellular Operators Association 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 tools within the nation is imported and fundamental customs obligation (BCD) of 20 per cent is levied on them.
“Higher customs obligation on telecom tools is disrupting value effectiveness for telecommunication firms. Exemption from BCD must be granted on telecom tools.
“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.