Budget 2020 India: The meeting between DoT and industry players will take place at a time when the telecom industry is reeling under stress of Rs 1.47 lakh crore in additional statutory dues following the recent Supreme Court observation on adjusted gross revenue (AGR).
India Budget 2020 expectations: Seeking much-needed fillip in the upcoming Union Budget to resolve the issues of burgeoning debt as well as thousands of crores in unpaid statutory dues, key Telecom industry bodies and players will meet the Department of Telecom (DoT) officials on January 6. Their discussions will include the industry’s demand for lowering levies. A DoT official has said that the department will be ‘supportive’ of the industry’s demand, according to a PTI report.
The meeting between DoT and industry players will take place at a time when the telecom industry is reeling under stress of Rs 1.47 lakh crore in additional statutory dues following the recent Supreme Court observation on adjusted gross revenue (AGR). Telecom companies also owe the government Rs 92,642 crore of the unpaid licence fee, and Rs 55,054 crore of outstanding spectrum usage charges.
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The Telecom department has voiced its support for a reduction in licence fee and Spectrum Usage Charges (SUC).
SUC should be reduced because money is being given by players in the auctions, a senior government official was quoted as saying by the news agency. Discussions will be held with several stakeholders of the industry like mobile operators and industry bodies such as Tower and Infrastructure Providers Association (TAIPA) and Cellular Operators’ Association of India (COAI). The DoT will subsequently convey the industry bodies’ and stakeholders’ budget-related expectations and suggestions to the Union Finance Ministry in a formal letter.
COAI has already put forward a few demands to the Central government. During a meeting with Union Finance Minister Nirmala Sitharaman on December 20, 2019, COAI raised the issue of AGR. It had also sought reductions in levies like licence fee and SUC. COAI suggested that licence fee, which is currently at 8 per cent, must be lowered to about 3 per cent. It also stated that the Central government should bring down the SUC from existing 5 per cent to 1 per cent. COAI also wanted to see if it could be done over an appropriate period of time, PTI reported.
The COAI had suggested that the central government must clear GST input tax credit dues worth about Rs 36,000 crore. The COAI had also sought removal of the high import duties on telecom equipment. The telecom industry has reportedly suggested the government to create an infrastructure bank, which will raise tax-free bonds, the proceeds of which can be used to lend to the companies at lower rates.