Telcos seek refund of Rs 35,000 crore input tax credit, GST waiver on licence fee, SUC, Telecom News, ET Telecom

Telecom operators want the government to reimburse input tax deduction (ITC) of around Rs 35,000 crore, reduce taxes and waive GST on license fees and frequency usage in the coming budget. According to pre-budget recommendations from the telecom industry body COAI, whose members include Vodafone Idea, Bharti Airtel and Reliance Jio, the telecommunications sector wants the government to suspend the universal service bond fund (USOF), which financially supports the roll-out of telecommunications services in rural areas. on the service providers.

“Refund unused ITC of Rs 35,000 crore by the industry, which can not be utilized in the near future. The current market dynamics have led to the accumulation of massive ITC.

“The credit will increase further with the upcoming significant capital expenditures to further enhance the customer experience and achieve the vision of Digital India,” COAI said.

At present, license fees paid by telecom operators are calculated as 8 percent of revenue from telecommunications services, technically called adjusted gross revenue (AGR).

The government has removed several revenue managers who were part of the AGR, as well as abolished frequency consumption taxes (SUC) on radio waves that will be purchased in future auctions as part of the telecommunications reforms.

“We thank the government for the recent forward-looking structural and procedural reforms, which we believe will not only bring stability and sustainability to the sector, but will also facilitate citizens’ digital needs.

“The telecom industry needs investment in robust and reliable communications infrastructure to meet the growing demand for connectivity. There is an urgent need to reduce the burden of charges on the sector,” said COAI CEO SP Kochhar.

The Cellular Operators Association of India (COAI) called on the government to lower license fees from 3 per cent to 1 per cent and reduce the SUC rate by 3 per cent on frequencies acquired in previous auctions.

The industry wants tariff relief for critical telecommunications equipment that will help service providers lay down more fiber and improve connectivity.

“The current license fee is 8% of AGR, which includes a fee of 5% to USO Fund. The existing USO Fund corpus, which is more than Rs 59,000 crore, is sufficient to meet the USO targets for the next few years “Contributions to the USO may be suspended until the existing corpus is utilized,” the COAI said. The industry body said that about 85 percent of the telecommunications equipment in the country is imported and basic duty (BCD) is imposed on 20 percent of them.

“Higher tariffs on telecommunications equipment disrupt the cost-effectiveness of telecommunications companies. Exemption from BCD on telecommunications equipment should be granted.

“Until the time that good quality equipment is available in India at affordable prices, the tariff for 4G / 5G related network products, along with other related products, should be brought down to zero,” COAI said.

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