Telcos seek cheap credit, lower licence fees, spectrum charges

New Delhi: Telecom companies on Monday asked the government for a reduction in levies such as licence fees, and spectrum usage charges and to facilitate cheap credit to them for lowering the cost of borrowing.

Telecom industry association, the Cellular Operators Association of India, requested the government to set up a working group comprising of members from the Department of Telecommunications (DoT), the Telecom Regulatory Authority of India, industry associations and other stakeholders to prepare guidelines for adopting the principle of input line credit to provide funding to telecom companies at a lower rate of interest.

“COAI has requested the government to facilitate funding at a lower rate of interest so as to plough more funds for network upgradation, maintenance and expansion to provide state of the art service at an affordable rate to the people,” it said.

DoT on Monday held pre-budget consultations with industry bodies and representatives of all operators. The COAI sought removal of GST on license fees, spectrum usage charges and payment of spectrum acquired in auction and refund of accumulated ITC (input tax credit), which cannot be utilised in the near future.

It also urged the DoT to reduce multiplicity of compliance, audits, investigations and Litigations for large pan-India service providers. It wanted DoT to issue a clarification that GST paid on goods and services used for erection, installation of telecom towers is available as an input tax credit.

The COAI presentation said the telecom sector is currently facing extreme financial hardship, and the input/output offsets for GST are out of balance for operators as output (revenue) has been declining, whereas inputs have remained stable or increased. This imbalance between input and output on GST has led to large credits, amounting to almost Rs 35,000 crore.

“We request this amount may be refunded or applied to other government liabilities of operators. GST regulations may be amended or notification be issued to allow refund of accumulated ITC. This should be done immediately to improve the cash flow of the ailing telecom industry,” the COAI said. (IANS)

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