Basic operators want removal of anomalies in customs duty

Our eFE Bureau in New Delhi

The basic service operators (BSOs) have demanded that anomaly in the customs duty on network infrastructure equipment within different segments of the telecom industry be removed.

In its pre-budget proposals for the year 2002-03, the Association of Basic Telecom Operators (ABTO) has pointed out that a higher duty structure is paid by BSOs for imported network infrastructure equipment required for wireless in local loop (WLL) services compared to the concessional duty of five per cent on similar equipment imported for cellular services.

“A 10 per cent higher basic duty being charged for basic services on this equipment translates to a net effective duty increase of over 17 per cent when compared with other services. This disparity should be removed,” as per the pre-budget proposals which were sent to the Ministry of Finance on December 3.

ABTO has also asked for a zero duty on items required for basic services. Currently, this equipment has an extremely high effective duty ranging from 38.74 per cent to 62.86 per cent.

ABTO has also demanded that the countervailing duty (CVD) should be removed and has recommended zero duty on all infrastructure equipment not being manufactured in India.

The customs duty on handsets required for WLL services is pegged at 5 per cent with a net effective duty at 26.67 per cent. Recently, the government allowed zero duty on components and accessories for handsets to be manufactured in India. Till manufacturers set up assembly lines, all duties should be removed, as per the proposals.

It has also demanded that the excise duty on all locally manufactured telecom equipment be pegged at the lowest level of 8 per cent and service providers sourcing indigenous telecom equipment should be allowed to setoff against the service tax payable on the services.