India's telecom industry wants to pay lesser taxes and need exemption on paying custom duties to the government. The license fee which telcos in India have to pay is way too high than what operators in other parts of the world need to. That is why, the industry has sought for a reduction in spectrum usage charges (SUC), spectrum acquisition charges, licence fee, removal of GST (goods and services tax) from certain areas, and exemption on paying custom duty from the government in the upcoming budget — more details on the story ahead.
Government Needs to Acknowledge the Upcoming Expenses
The Indian government earns a hefty sum of revenue from the telecom industry. In figures, the amount that the government gets from the industry is Rs 58,000 crore annually. It is worth noting that the sector has already invested up to Rs 11.24 lakh crore until now to provide telecom services.
As per an ET Telecom report, according to the director-general of the Cellular Operators Association of India (COAI), SP Kochhar, the government needs to acknowledge the kind of expenses that the industry is going to face in the coming time. With the need to expand 4G across the country, operators are also looking to introduce 5G for which a dire need of fiberisation would need to fulfilled.
All this would involve a mountain of costs, and if the telcos are not offered relief in some way, the industry might crumble. Kocchar further said that the license fee should be brought down from 3% to 1% as early as possible for DoT/government to cover admin costs.
COAI has asked the government to abolish the Universal Service Obligation Fund. The telcos have to pay 8% of their adjusted gross revenue (AGR) to the government out of which 5% of the money goes to this fund. Along with this, the telecom body has asked the government to reduce the spectrum usage charges by 3% for the three telcos (Bharti Airtel, Reliance Jio, and Vodafone Idea).
Then there is the 4G spectrum auction in March. The telcos are not expected to bid aggressively given the debt they are already in. The association has further suggested removing GST from various areas for the telecom operators saying that it is how the international bodies also work.
“The industry recommends suitable amendments in the GST law may be made to allow a refund of unutilised ITC. Alternatively, an unutilised amount may be applied to other government liabilities of operators,” said Kochhar.