Tax proposal on spectrum will put telecom industry at risk: Assocham

Follow Us

The Associated Chambers of Commerce and Industry of India (Assocham), in a letter to Finance Minister Arun Jaitley, said that the proposed 15% service tax on all spectrum allotment by the Centre and spectrum transactions between licensees will place the telecom industry in a precarious financial position.

india-mobile-internet




The industry body said that the move would raise cost of acquiring spectrum by up to 71%, dealing an additional blow to debt-laden carriers.

"Service tax on spectrum assigned by the government to telecom operators is detrimental to the industry's growth while increasing the cost of service and thus directly impacting the common man. In fact, the National Telecom Policy of 2011 lays emphasis on affordability and accessibility," the letter stated.

The letter, which was written by D.S. Rawat, secretary general, Assocham, and P. Balaji, chairman, Assocham National Council on Telecom, said that telcos would have to shell out another Rs 30,000 crore as tax outgo owing to the levy, adding that the proposal would adversely affect telcos' investible corpus into networks and government.

According to Assocham, the proposed tax will put at risk major government initiatives like 'Digital India', 'Smart Cities' and rural penetration of data connectivity and services.

The industry body urged the minister to restrict the proposed service tax to only transactions involving spectrum trading between private operators, adding that the credit on such transactions should not be deferred.

"The increase in spectrum cost will impact the sector's health and adversely impact the investment corpus of telecom operators, leading to challenges in rolling out new technology and networks like 4G," Assocham added.

Reported By

Telecom Analyst

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

Recent Comments

TheAndroidFreak :

Off Topic : Snapdragon 8 Gen 5...uses TSMC N3E and Samsung Foundry 2nm.

OnePlus 13 and Xiaomi 15 to Feature Qualcomm Snapdragon 8…

TheAndroidFreak :

1000GB is too less. My data is getting constantly finished within 15 days. Thankfully 1500 Jio unlimited working on two…

Airtel to Migrate to Standalone 5G FWA by December

Shivraj Roy :

yeah ,airtel isnt even trying to push 3.3TB on FWA

Airtel to Migrate to Standalone 5G FWA by December

TheAndroidFreak :

Thats sad. Just copying things won't help Airtel. Airtel honeymoon period of five years is over now.

Airtel to Migrate to Standalone 5G FWA by December

TheAndroidFreak :

If BSNL provides 50GB data and unlimited calls at 1299 for 336 days with PAN India VoLTE, then Jio and…

BSNL Reaches 41000 4G Sites Milestone

Load More
Subscribe
Notify of
22 Comments
newest
oldest most voted
Inline Feedbacks
View all comments