Today, the top telecom sector body urged the government to exempt the levy of basic customs duty (BCD) charges on telecom equipment like optical transport equipment/networks, IP radios, MIMO/LTE products, soft switches, VoIPs, PTN, MPLS -TP, etc. in the upcoming union budget 2023, which will further help in the deployment and smooth rollout of 5G services in India.
Higher customs duty on telecom equipment is disrupting the cost-effectiveness of the telecom firms as around 85 percent of the telecom equipment in the country is imported.
The industry body suggested exempting the levy of BCD charges as it will be beneficial for importing essential equipment to boost the 5G services rollout.
“BCD of 20 per cent is levied on import of most of telecom equipment like optical transport equipment/networks, IP radios, MIMO/LTE products, soft switches, VoIPs, PTN, MPLS -TP, etc. which is disrupting the cost effectiveness of the telcos,” said the Cellular Operators Association of India (COAI), the apex body that represents the telecom sector.
“Telcos are constantly upgrading infrastructure to keep up with the new- age technologies. However, the required facility to manufacture the equipment has not yet been set up in India. Therefore, telcos are dependent on imports,” COAI Director General, Lt. Gen. Dr. S.P. Kochhar (retd) said.
Considering the financial health of the industry and the huge investments,”relaxation in import duties will go a long way in helping us realise our dream of an aAtmanirbhar Bharat”, he added.
The apex telecom made several recommendations for the Union Budget 2023-24 to the Ministry of Finance.
The COAI requested that the Universal Service Obligation (USO) Fund contribution of 5 percent of adjusted Gross Revenue (AGR) may be suspended till the existing USO corpus is exhausted, and the license fee is brought down from 3 percent to 1 percent at the earliest to cover only administrative costs by the DoT/government.
For facilitating ease of doing business, a centralized registration process is recommended for the industries having spread in all 36 States/UTs.
“As an alternative, a centralised jurisdiction may be formed to govern the day-to-day affairs of the taxpayers,” said the body.
The COAI also requested the government to facilitate centralized assessment and audit procedures for large taxpayer units with over Rs 500 crore turnover and presence in over 12 states/UTs.
This would limit this facility to less than 1 percent of all corporates and ensure ease of doing business with no corresponding revenue loss to the government.
Kochhar said that given the enormous burden of taxes and regulatory levies on telecom operators and the critical nature of the service to drive ‘Digital India’, “a special benefit may be provided to telecom operators by way of exemption of GST on regulatory payments of LF, SUC and spectrum assigned under auction.”
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