Budget 2019: 5 Point Wishlist Of Ailing Telecom Sector for Finance Minister Nirmala Sitharaman
In the midst of rising competition and financial crisis, the Telecom Industry is now all ears to Finance Minister Nirmala Sitharaman's maiden Budget for 2019-20 on July 5 seeking the much needed financial reforms.
However, noticing the sentiments of telecom operators and industry watchdogs, we have complied 5 major wishlist of telecom sector for the Union Budget 2019:
1. As the telecom sector has been burdened with high debt and increased costs over the past few years, several industry experts want the government to provide exemptions on goods and services tax (GST). Cellular Operators Association of India (COAI) also believe that higher customs duty on the telecom equipment is disrupting the cost effectiveness of the telecom operators. Therefore, it wants the government to consider exemption from the levy of BCD (basic customs duty) granted on the telecom equipment. The industry body also want exemption from IGST (Integrated Goods and Services Tax) may also be granted for hassle-free importation of such vessels.
2. COAI also wants exemption from GST on spectrum payment, license fees and spectrum usage charge. "Given the huge burden of taxes and regulatory levies on telecom operators and considering the fragile state of their finances, special benefit should be provided to telecom operators in GST by way of exemption on regulatory payments of LF, SUC and spectrum assigned under auction," it said.
3. Recently, Union Telecom Minister Ravi Shankar Prasad also sought an overall reduction in goods and services tax (GST) rate in telecom sector from 18 per cent to 12 per cent. Lowering the GST rate to 12 per cent would reduce the monthly mobile bill of users. Prasad had also urged for a reduction of licence fees by 25 per cent. Currently, telecom operators of the country pay 8 per cent licence fee of their adjusted gross revenue and if considered operator would end up paying a licence fee of 6 per cent thereby.
4. The Broadband India Forum (BIF) also said that for achieving the National Digital Communications Policy's (NDCP) target of $100 billion investment in India's telecom and digital space, the businesses need to be made more profitable and attractive for which high levies and spectrum charges have to be reduced. "Exorbitant spectrum prices, very heavy levies and charges and some onerous licence conditions need to be corrected on priority to boost investments," it said.
5. Some other suggestions given various industry body and industry experts include fast GST refunds to operators, extra fund allocation to revive ailing state-run telcos BSNL and MTNL, funds for domestic manufacturing of telecom equipment and a Rs 100 cr fund to initiative 5G network across the country.
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