The Cellular Operators Association of India (COAI), which represents telecom companies like Reliance Jio, Bharti Airtel, and Vodafone Idea, has reiterated its demand to abolish the universal services obligation fund (USOF) levy, reduction in licence fee, exemptions on customs duty on import of telecom equipment and goods and services tax (GST), among other things.
The association has suggested these measures to the finance ministry ahead of the Union Budget, which will be presented in the Parliament on July 23.
Currently, telecom operators pay 8% of their adjusted gross revenue (AGR) to the government as licence fee. Of this, 5% goes to the Digital Bharat Nidhi (previously known as USOF) and 3% goes in the general exchequer.
“Considering the huge capital that telecom service providers (TSPs) have to invest in the current scenario, especially for the deployment of 5G, COAI recommends that the USOF levy be abolished,” it said on Wednesday.
“Alternatively, the government may consider the suspension of the USO contribution of 5% of AGR till the existing USO corpus of approximately Rs 80,000 crore is exhausted,” COAI added.
The association further said the licence fee should be brought down to 1% from 3% at the earliest, so that it covers only administrative costs by the department of telecommunications (DoT).
On the custom duty, COAI said a higher duty of 20% on import of telecom equipments puts an additional financial burden on the operators and the same should be reduced to zero.
“Until high-quality equipment is available domestically at competitive prices, COAI urges the government to reduce customs duties for 4G and 5G network products, as well as other related items, to Nil,” it said.
Among other key demands, COAI has requested for the introduction of 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 16 assessment years, from the existing 8 years.
COAI has also requested the government for exemption of GST on licence fees, spectrum usage charges and spectrum acquisition fee.
From: financialexpress
Financial News