Crores of telephone users can hope for a cut in call charges with Finance Minister P Chidambaram favouring a unified levy of taxes for the telecom sector.
Telecom operators pay 30 per cent of their revenue as levies like annual licence fee, spectrum charges, contribution to universal service obligation (USO) fund and the total burden adds up to 40 per cent along with service tax.
“We have proposed a single unified levy. We have asked Department of Telecom to constitute a committee. The committee to the best of my knowledge has not yet submitted the report…,” said Finance Minister P Chidambaram.
DoT sources said rationalisation of tax is necessary and the committee has taken certain steps towards it. They, however, did not disclose the details.
Telecom players have been asking for rationalisation in taxes with the introduction of a single unified levy saying that it would result in a cut in telephone tariffs.
Presently, there are different licence fee for access services like basic and cellular mobile services and STD and ISD operations.
The industry has been seeking replacement of several taxes by a single service tax to lower the tax burden and encourage more investment in the world’s fastest growing telecom market.