In a bid to ensure that the unabated growth of the telecom sector continues in the next fiscal, the industry is looking forward to a reduction in annual licence fee, zero duty and abolishment of VAT, among other things in the forthcoming Budget.
Telecom service providers have reiterated their long-standing demand that the revenue share licence fee be initially reduced to 6% and then brought down further in the coming years, as revenue to the government are protected because of rise in sector?s revenue.
Currently, the telecom sector attracts various levies such as license fee, spectrum charges, access deficit charge, service tax, entry tax, octroi and stamp duties. BT India managing director Sudhir Narang says there should be a reduction in the annual licence fee, mainly USO contribution, which is 5% at the moment.
Cellular Operators Association of India (COAI) director general TV Ramachandran says, ?All these levies, which act as a bottleneck and stifle growth, should be removed and replaced by a single levy, implemented in a transparent manner.?
The Indian Cellular Association has sought re-imposition of 4% additional duty to ensure a level playing filed for Indian manufacturing due to cheaper imports.
?The cost of importing a handset into India (from China) is nearly at par with the projected cost of manufacturing a handset in India. Hence, continuing with the 4% duty on import of handset till 2010 would make the Indian manufacturing business case viable.?
Handset manufacturers have also recommend that basic customs duty should be brought to zero on components, parts, spares and accessories for after sales service and reselling, battery packs for cellular phones, chargers and adaptors. The industry wants duties on Internet data cards should be brought in line with duties of mobile cellular handsets.