COAI asks for relief in tax levies for telecom industry in Budget 2023

The Cellular Operators Association of India (COAI) has requested that the Universal Service Obligation (USO) contribution of 5% of AGR to be suspended till the existing USO corpus is exhausted and License Fee to be brought down from 3% to 1% for covering only administrative costs by the DoT/Government.

Currently, a basic customs duty (BCD) of 20% is applicable on imported telecom equipment. The industry body has asked for it to be exempted to aid the 5G rollout in the country. It has also requested the exemption of Goods & Service Tax (GST) on spectrum acquisition charges and refund of more than Rs 32,000 crore input tax credit, among others.

COAI said that the government should also consider introducing 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 sixteen assessment years instead of the existing eight years, enabling the telcos to recover from the stress they have been under for several years now.

S.P. Kochhar, Director General, COAI, said, “Telecom is one of the highly regulated sectors in the country. Given the huge burden of taxes and regulatory levies on telecom operators, and the critical nature of the service to drive Digital India, a special benefit may be provided to telecom operators by way of exemption of GST on regulatory payments of LF, SUC and spectrum assigned under auction. It would provide substantial relief and help in the revival of the industry.”