The Cellular Operators Association of India (COAI) has asked the Indian government to exempt the customs duty on telecom equipment ahead of the budget 2023. Presently, a basic customs duty (BCD) of 20% is applicable on imported telecom equipment. The industry body has asked for it to be exempted to aid the 5G rollout in the country.
COAI said, "Higher Customs duty on telecom equipment is disrupting the cost-effectiveness of the Telcos. Around 85% of the Telecom Equipment in India is imported under Chapter Head 8517." Most of the telecom equipment, such as VoIPs, PTN, IP Radios and more, attract a custom fee of 20%.
Along with this, COAI has again requested the government to bring down the license fee to 1%. The industry body has said that the USO (universal service obligation) contribution should be suspended until the current USO corpus is exhausted, and the license fee should be brought down from 3% to 1%. COAI also talked about the need to make the definition of gross revenue abundantly clear so that revenues from non-telecom activities is not counted when the dues are measured.
COAI said that the government should also consider introducing a special regime for the telecom operators under section 72 of the Income Tax Act, 1961, wherein the business losses can be carried forward and set off till sixteen assessment years instead of the existing eight years. This would enable the telcos to recover from the stress they have been under for several years now.
S.P. Kochhar, Director General, COAI, said, "Telecom is one of the highly regulated sectors in the country. Given the huge burden of taxes and regulatory levies on telecom operators, and the critical nature of the service to drive Digital India, a special benefit may be provided to telecom operators by way of exemption of GST on regulatory payments of LF, SUC and spectrum assigned under auction. It would provide substantial relief and help in the revival of the industry"