Telecom companies want GST on spectrum, licence fees scrapped or refund of input credits

0
17

MUMBAI: Telecom Companies, burdened with debt and engaged in a battle for purchasers, are set to ask the federal government to exempt them from items and Companies tax on funds made in direction of spectrum and licence fees.

The Cellular Operators Association of India plans to put in writing to the Department of Telecommunications to elucidate how their burden will ease if cost of regulatory levies by telcos is exempted from GST, individuals acquainted with the matter stated. Alternatively, they’re in search of a refund of input tax credit score of about Rs 30,000 crore as a result of they’re unable to set it off towards GST by charging their customers attributable to intense competitors and low tariffs.

“At an industry level, almost Rs 30,000 crore is stuck for all operators due to GST blockage,” stated an individual conscious of the matter. COAI didn’t reply to ET’s queries on the difficulty.

The input tax credits have collected since GST was launched in July 2017 and are impacting the stability sheets of Telecom Companies encumbered with debt of Rs 7 lakh crore and in search of a reduction package deal from the federal government.

“The credit includes a significant portion of tax being imposed on government levies such as licence/ spectrum fees. The tax on such government levies or other procurements was never meant to have a cascading impact. However, given the present inability to utilise credits, the taxes on these procurements are blocked,” stated Uday Pimprikar, accomplice, tax and regulatory Companies, at EY India.

“The working capital challenges of the Telecom sector can be partly alleviated by enabling a speedy refund of accumulated input tax credits. It is also essential to deal with the issues of declining average revenue per user, which may lead to further accumulation in future on account of the significant capex spends by the sector,” stated MS Mani, a accomplice at Deloitte India.

Industry specialists stated the collected input tax credit score is impacting the working capital of telcos. COAI had stated earlier that debt restructuring, a reduce in licence fees and spectrum prices, and the discharge of input tax credit score locked up with the federal government are among the many steps that may alleviate their stress.

Competition triggered by the entry of Reliance Jio Infocomm in September 2016 has resulted in consolidation that’s diminished the eight-operator market to 3 personal Companies – Bharti Airtel, Vodafone Idea and Jio.

Vodafone Idea posted a loss of Rs 4,974 crore within the quarter ended September, whereas Bharti Airtel, now India’s No. 2 telco, posted a 65% fall in revenue.

ET reported final week that the federal government is contemplating a reduction package deal for the Telecom business.

if(geolocation && geolocation != 5) {
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘338698809636220’);
fbq(‘track’, ‘PageView’);
}

Leave a Reply