Budget wishlist: Telcos’ body COAI seeks cut in regulatory levies

Telcos’ industry body COAI has sought reduction in regulatory levies, including in licence fee to 0.5-1 per cent from three per cent, in the upcoming Budget. In its submission to the Government, the Cellular Operators Association of India (COAI) suggested that funds to the Digital Bharat Nidhi should be paused till the time unused corpus is completely utilised by the telecom department.

COAI members include Reliance Jio, Bharti Airtel and Vodafone Idea. The industry body said it has been advocating for measures that would reduce the sector’s financial burden, enabling further expansion and rollout of next-generation connectivity to achieve the goal of `Viksit Bharat’.

“The licence fee, which is a combination of the licence (three per cent of AGR) and Digital Bharat Nidhi Contribution (five per cent of AGR), is a huge financial burden for the licensed telcos,” the association said. COAI has requested that the licence fee be reduced from 3 per cent to 0.5-1 just to cover the administrative costs.

On GST policy related issues too, COAI has recommended specific measures to help reduce the financial burden and offer relief to the sector. “Special benefit may be provided to telecom operators in GST by way of exemption of GST on regulatory payments of licence free (LF), spectrum usage charges (SUC), and spectrum assigned under auction,” it said. Alternatively, COAI has suggested that the rate of GST under Reverse Charge on spectrum payment, licence fees, SUC be reduced from the existing 18 per cent to 5 per cent.

This would be revenue neutral to the Government and shall help in reducing ITC accumulation. “COAI has also suggested that usage of existing ITC balance be allowed for discharging GST under RCM (Reverse Charge Mechanism) on LF/SUC, which will not only protect the cash outflow for telcos but also help in utilising accumulated ITC,” it said. COAI argued that telecom is no longer just a vertical, but a ‘horizontal value-added enabler’ for all other verticals, and accordingly, a recalibration of spectrum pricing and assignment models too are necessary. Mukesh Ambani, Sunil Mittal, Kumar Mangalam Birla.