Budget expectations: Prior to the budget session, the carrier sent a recommendation to the central government, among other things, regarding the request. Telecommunications operators, including large corporations, are reportedly asking the government to reimburse a temporary tax credit (ITC) of around Rs. 35,000. The Center also demanded that license fees and spectrum usage tax be reduced and GST exempted during the next budget period. The budget session will start on January 31st. Finance Minister Nirmarasi Salaman announced an annual budget of 2022 on February 1, and the government recently announced it.
According to a pre-budget recommendation from the telecommunications industry group COAI, which includes Vodafone Idea, Bharti Airtel and Reliance Jio, the telecommunications sector will give the government the Universal Service Obligation Fund (USOF) to financially support the deployment of telecommunications services in rural areas. I want to stop. It reduces the burden on the area and service provider.
“We will refund the industry’s 35,000 rupees of unused ITCs, which will not be available in the near future. The dynamics of the current market have led to a large accumulation of ITCs,” said COAI.
“Credits will be further increased by future significant capital spending to further enhance the customer experience and achieve the vision of Digital India,” COAI added.
Currently, the license fee paid by a telecommunications carrier is calculated as 8% of the revenue earned from telecommunications services and is technically referred to as adjusted gross revenue (AGR). The government has removed some sources of revenue that were part of the AGR and abolished the spectrum usage fees (SUC) for radio waves purchased at future auctions as part of communications reform.
“We thank the government for recent positive structural and procedural reforms, which we believe not only bring stability and sustainability to the sector, but also promote the digital needs of our citizens.
“The telecommunications industry needs to invest in robust and reliable telecommunications infrastructure to meet the growing demand for connectivity. There is an urgent need to reduce the tax burden on the sector.” Stated.
The Association of Cellular Operators of India (COAI) has requested the government to reduce the license fee for spectra acquired in past auctions from 3% to 1% and the SUC rate by 3%.
“A typical license fee is 8% of AGR, which includes a tax of 5% on USO funds. Existing USO funds have a corpus of over Rs 59,000, which is a target for USO over the next few years. Enough to achieve. Donations to the USO can be suspended until the existing corpus is used, “COAI said.
According to industry groups, about 85% of domestic telecommunications equipment is imported and a 20% basic tariff (BCD) is levied. “Raising tariffs on telecommunications equipment has confused the cost-effectiveness of telecommunications companies. BCD exemptions must be granted on telecommunications equipment.
“We need to eliminate tariffs on 4G / 5G-related network products and other related products until high-quality equipment is available in India at an affordable price,” says COAI.
(With PTI input)
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Telecommunications companies require a GST exemption for license fees.Know more
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