Tower and Infrastructure Providers Association (TAIPA) Says Telecom Industry Deserves Lower Tax Rate Under GST Government

Tower and Infrastructure Providers Association (TAIPA) has raised its voice against the recent GST announcement of 18 percent tax levy for telecommunications services. The organisation says that the move will impact the consumer at large.

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The association which manages the infrastructure of Bharti Airtel and the other main TSP’s says that the non-availability of Input tax credit (CENVAT credit) (under the Plant and Machinery) to tower infrastructure business will lead to a tremendous impact on the cost of services and billing by IP-1 to Telecom Service Providers (TSPs), which will either be passed to consumers or it will further add on to the massive debt of TSPs due to the hyper-competitive market.

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Furthermore, this step will impact infrastructure rollout in semi-urban areas and rural areas, a region which has already lagged behind in connectivity either due to inadequate infrastructure or unviable business model.

The Indian Telecommunication Infrastructure Industry has always supported and overwhelmed GST regime as it helps the industry to bring in a synergy between various departments, taxations and will ultimately enable the ease of doing business by creating ‘one nation-one tax.’

Telecommunication in India has emerged as a key driver of economic and social development in an increasingly knowledge-intensive global scenario. The Indian telecom sector has undergone a revolutionary transition in the last two decades to become the World’s second largest telecommunication market with more than 1.1 billion subscribers connected through 4,50,000 towers mounted with over 15 lakh BTSs. As per the government report, the mobile sector’s contribution to GDP is presently 6.5 percent and will increase to 8.2 percent by 2020.