NEW DELHI: Telecom group Cellular Operators Association of India (COAI) Wednesday said rationalisation of taxes as a part of the national policy would be vital as it continues to pose a challenge.
“The high level of levies and taxes continues to be a challenge for the sector. The telcos pay up to 30% of their revenues to the government, by way of various levies and taxes, which is an enormous burden on the industry,” COAI director general Rajan S Mathews in a statement said.
Delhi-based telecom body represents Bharti Airtel, Vodafone Idea and Reliance Jio.
The group, however, hailed that the government recognised the financial distress of the telecom sector and has provided relief in the form of deferments of spectrum payments.
Late evening Wednesday, Finance Minister said that the Cabinet has approved the recommendation of the Committee of Secretaries (CoS) on the relief to the stressed telecom sector and allowed telcos a 2-year moratorium on spectrum-related dues.
“This (payment deferment) will certainly provide some immediate cash flow relief to the industry,” Mathews added.
The Cabinet headed by Prime Minister Narendra Modi has decided to defer receipts of spectrum auction installments due from the telecom carriers for 2020-21 and 2021-2022.
The telecom group said that 30% of what is collected is passed on to the government.
The group has asked the government to consider the vexing issue of AGR and address the anomaly of continuing with the previous legacy issue of revenue share and License Fees (LF) and Spectrum Usage Charge (SUC) when spectrum has already been paid for upfront.
“We hope the government will consider this request of either eliminating AGR or redefining these in line with our request and then reduce the LF and SUC to 3% and 1% respectively,” Mathews added.