COAI writes to FM Nirmala Sitharaman, seeks relief measures

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Published: April 3, 2020 3:30:54 AM

The COAI said given the current situation and adverse impact on the economy, the government should rationalise high burden of regulatory levies on the telcos.

The COAI said given the current situation and adverse impact on the economy, the government should rationalise high burden of regulatory levies on the telcos.

The Cellular Operators Association of India (COAI) has written another letter to the government seeking relief measures such as reduction in licence fee and spectrum usage charges (SUC) as well as access to low-cost funding. The association said in the last few days, the load on telecom networks has seen an exponential surge due to the Covid-19 outbreak and people working from home.

“Telecom service providers (TSPs) have invested and will continue to invest significantly in the telecom infrastructure and it has enabled to meet the increased demand for telecom services,” COAI director general Rajan Mathews said in a letter dated March 28 to finance minister Nirmala Sitharaman.

The COAI said given the current situation and adverse impact on the economy, the government should rationalise high burden of regulatory levies on the telcos. “The effective rate of the SUC should be reduced by 3% for all TSPs and licence fee contribution should immediately be brought down from 8% to 3%,” it said.

The association also said to provide liquidity and low-cost funding, refund of unutilised input tax credit should be made, or soft loan at MCLR should be given to companies using the GST input credit as collateral.

It also sought exemption of levy of the GST on licence fee, SUC and payment of spectrum acquired in auctions. “Exempt service tax on amount of licence fee/SUC payable by telecom operators in compliance with the Supreme Court order,” the letter said.

The COAI said there has been a severe disruptive impact on the global supply chain, demand and supply elements and most importantly, on cash flows of companies due to slowing down economic activities. “This downturn will have an impact on all payments including those of employees, interest, loan repayments and taxes.”

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