Telecom Industry Urges Government For Funding At Lower Rates, Reduce Levies
A telecom tower (Photographer: Susana Gonzalez/Bloomberg)

Telecom Industry Urges Government For Funding At Lower Rates, Reduce Levies

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Telecom industry on Monday urged the government to facilitate funding for telecom companies at lower interest rates to help them reduce capital costs.

Representatives from the industry met telecom ministry officials to communicate their suggestions to help the debt-ridden sector. The Department of Telecommunications, which has given time till Tuesday to send in written recommendations, will compile these demands and send them to the finance ministry for consideration in the forthcoming Budget.

According to a senior government official, most demands made were on similar lines as before, including reduction in Universal Service Obligation Fund levy and licence fees.

The official added that one of the recommendations was related to input line credit.

Besides, the industry has also sought facilitation of funding at lower interest rates to telecom companies, removal of Goods and Services Tax on licence fee, spectrum usage charges and on payment of spectrum charges, and refund of accumulated input tax credit, the official said.

They have also urged that telecom towers be included in definition of plant and machinery for input tax credit, and further promotion of Make in India by setting up a dedicated fund that can be used by purchaser of telecom equipment.

One of the representatives present in the meeting said the industry has requested setting up of a working group with stakeholders from the telecom ministry, Telecom Regulatory Authority of India and the industry, which will work on preparing guidelines for adopting the principle of input line credit.

The representative said that the telecom industry is capital intensive and needs to generate funds from domestic sources at affordable rates.

"We have requested the government to facilitate funding at lower rate of interest so as to plough more funds for network upgradation, maintenance and expansion," another representative said.

Other recommendations included reduction in USOF contribution to 3 percent, and license fee to 1 percent of adjusted gross revenue.

The industry also sought that the payment of regulatory levy should be exempted from tax under GST.

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