Telcos seek policy for spectrum auctions
NEW DELHI: Telecom operators have made a pitch for a reduction in levies payable to the government and a long-term policy for spectrum auctions, Telecom Regulatory Authority of India (Trai) chairman RS Sharma said.
The regulator met top officials of telecom service providers (TSPs) on Tuesday to outline issues to be taken up with Trai in the course of 2018.
“TSPs raised the issue of multiplicity of levi es which they have to pay... they said GST... whether there could be some rationalisation in this particular aspect or not,” Sharma said, adding that the regulator has sought more inputs after which it will decide whether or not to issue a consultation paper. Telecom operators pay around 3-5% and 8% of their adjusted gross revenue as spectrum usage charges and licence fees, respectively, to the government. Telecom services also attract 18% GST.
In a written reply to the Lok Sabha in November, telecom minister Manoj Sinha said that the department of telecommunications has suggested to the finance ministry that GSTon telecom services be lowered to 12%.
The recommendation was made as part of the annual budget exercise and the matter is with the finance ministry’s department of revenue for necessary action, Sin ha had said. A decision to change the tax rate has to be approved by the GST Council, the federal body that decides on all indirect tax matters.
Trai has in the past recommended that the telecom depart- ment cut licence fees and spectrum usage charges, given the debt burden on telecom operators. The regulator has also favour ed a reduction in GST rate.
According to estimates by the Indian Banks Association, the total liabilities of the sector stood at ₹7.75 lakhcro reason March 31, of which bank borrowings and liabilities towards spectrum payment to the telecom department stood at ₹5.8 lakh crore.
The sector is in the midst of a tariff war started by new entrant Reliance Jio Infocomm Ltd, which offered services free for almost seven months and later announce drock-bottom tariffs in April. This led to pressure on revenue streams of other operators who were forced to match tariffs.