Telecommers want more relief | india | Hindustan Times
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Telecommers want more relief

india Updated: Jun 23, 2009 00:26 IST
Manoj Gairola
Manoj Gairola
Hindustan Times
Indian telecom service providers

Indian telecom service providers want that the current multiple-levy regime should be replaced by a single tax, which could be about one per cent of the adjusted gross revenue (AGR).

The current universal service obligation (USO) levy of up to 5 per cent of AGR, used to help spread telephony to remote areas, should continue as it is, they say. Currently, the total levies account up to 25 per cent of AGR.

Meanwhile, the Rs 40,000 crore Indian telecom equipment manufacturing industry wants that the government should remove excise duty, which is 8 per cent on manufacture of telecom equipment (except mobile handsets). They also want a 4 per cent special additional duty (SAD) on imports abolished.

“Zero excise duty and no special duty has boosted manufacturing of mobile handsets in India and about 90 per cent of India’s telecom manufacturing is of cell phones only,” said Arun Khanna, a director in Shyam Telecom. “Therefore, excise duty and SAD should be completely eliminated to promote local manufacturing.”

Telecom service providers, whose annual industry revenue is of the order of Rs. 1.4 lakh crore, have to pay a number of taxes to the central government include annual licence fees (including USO contribution), usage charges for radio frequency spectrum and service tax.

The total levies account anywhere between 24 per cent and 30 per cent of the adjusted gross revenue (AGR) of an operator depending on the area of operations. This is among the highest in the Asian countries.

“We have sought a reduction and rationalization of various duties and levies in order to simplify the regime and enable a reduction in the cost of services,” said TV Ramachandran, director-general of cellular operators association of India (COAI).