In its recommendations on behalf of the telecom industry, the COAI said that considering the huge capital that telecom service providers (TSPs) have to invest in the current scenario, especially for 5G deployment, the Fund tax Universal Service Obligation (USOF) should be abolished.
Alternatively, the government may consider suspending USO contribution of 5 per cent of adjusted gross revenue (AGR) until the existing USO corpus of about Rs 80,000 crore is exhausted, the industry body said.
“The telecommunications industry plays a critical role in this transition by providing affordable connectivity and inclusion. Therefore, reducing the tax burden of TSPs and facilitating investment opportunities are not only an economic necessity but a strategic investment for the future of the country,” said Lieutenant General Dr. S.P. Kochhar, Director General of COAI.
COAI also recommended that the license fee be reduced from 3 per cent to 1 per cent, so that it covers only the administrative costs of the Department of Telecommunications/government, thus freeing TSPs from additional financial burden.
“The industry is also concerned about the definition of gross receipts (GR). The definition of GRs should be specified, stipulating that income from activities for which a license is not required should not form part of GRs,” the COAI said.
COAI also urged the government to introduce a special scheme for telecom operators under section 72 of the Income Tax Act, 1961, under which business losses can be carried forward and set off over 16 years of assessment of the eight years existing.
The telecom industry's apex body also asked the Finance Ministry to exempt the additional AGR liability arising from the recent Supreme Court judgment from service tax.
Specifically, a relief has been requested for the exemption from paying the Services Tax for the period between April 2016 and June 2017, and for various services issued in November 2018.
The industry body also recommended that customs duties be reduced to zero and then gradually increased depending on the creation of an ecosystem for manufacturing telecom equipment in India.
COAI has also requested that the government waive license fees, spectrum usage charges and spectrum acquisition fees from GST to provide much-needed relief to the sector.
Alternatively, the government may consider suspending USO contribution of 5 per cent of adjusted gross revenue (AGR) until the existing USO corpus of about Rs 80,000 crore is exhausted, the industry body said.
“The telecommunications industry plays a critical role in this transition by providing affordable connectivity and inclusion. Therefore, reducing the tax burden of TSPs and facilitating investment opportunities are not only an economic necessity but a strategic investment for the future of the country,” said Lieutenant General Dr. S.P. Kochhar, Director General of COAI.
COAI also recommended that the license fee be reduced from 3 per cent to 1 per cent, so that it covers only the administrative costs of the Department of Telecommunications/government, thus freeing TSPs from additional financial burden.
“The industry is also concerned about the definition of gross receipts (GR). The definition of GRs should be specified, stipulating that income from activities for which a license is not required should not form part of GRs,” the COAI said.
COAI also urged the government to introduce a special scheme for telecom operators under section 72 of the Income Tax Act, 1961, under which business losses can be carried forward and set off over 16 years of assessment of the eight years existing.
The telecom industry's apex body also asked the Finance Ministry to exempt the additional AGR liability arising from the recent Supreme Court judgment from service tax.
Specifically, a relief has been requested for the exemption from paying the Services Tax for the period between April 2016 and June 2017, and for various services issued in November 2018.
The industry body also recommended that customs duties be reduced to zero and then gradually increased depending on the creation of an ecosystem for manufacturing telecom equipment in India.
COAI has also requested that the government waive license fees, spectrum usage charges and spectrum acquisition fees from GST to provide much-needed relief to the sector.
