Telecom Infrastructure Companies Likely To Incur Rs 625 Crore Loss Under GST, Says Industry Body TAIPA
Telecom infrastructure companies are likely to incur a loss of around Rs 625 crore under the current GST norms, which do not provide input tax credit to the players in the segment, according to the industry body TAIPA.
In a letter to the Department of Telecommunications on Friday, the Tower and Infrastructure Providers Association shared estimates that the industry has to incur a loss of Rs 1.25 lakh-Rs 1.5 lakh per tower.
"During the past 4-5 years, the Industry has already lost Rs 2,500 crore of ITC (input tax credit) so far. Going forward, the demand for telecom towers is likely to cross 50,000 towers on account of 5G, etc., which will lead to an additional loss of Rs 625 crore to the industry," TAIPA said in the letter.
The GST regime was tailor-made to prevent cascading of the taxation regime and, accordingly, had a provision of input tax credit on the telecom towers in November 2016, it added.
The TAIPA also said the telecom towers were later exempted from the definition of 'plant and machinery' in 2017, which deprived its infrastructure providers from availing the ITC against the GST paid on telecom towers.
"With the annual budgetary exercise likely to conclude soon, we request your urgent support in taking up this matter with the Ministry of Finance if not taken up earlier," TAIPA Director General TR Dua said in the letter.
He added that the extension of ITC to telecom towers would provide a much-needed momentum to the Digital India programme and assist in creation of resilient telecom infrastructure in the country.
Taipa, whose members include companies like Indus Towers and ATC, said it raised the matter with Telecom Secretary Anshu Prakash on Jan. 6, so that it can be taken up with the finance ministry prior to the finalisation of the annual Budget.