Headlines Of The Day
Union Budget to be presented today
Union Finance Minister Nirmala Sitharaman will today, February 1, 2023 present the last full-fledged Union Budget of the Modi government before the 2024 Lok Sabha elections. The plan is expected to boost funds for infrastructure, defense and logistics, providing windfalls for related companies.
Prime Minister Narendra Modi has already given a hint of how his government sees it. “Amid the unstable global economic situation, India’s budget will not only try to fulfil the hopes and dreams of the common man of India, but the ray of hope which the world is seeing should be seen more brightly,” he said on the eve of the Budget.
The telecom industry is seeking government support for the expansion of infrastructure, such as the rollout of 5G networks and the development of internet connectivity in rural areas. Additionally, it is also expecting tax benefits to encourage investment in the industry, and regulations that promote fair competition and protect consumer interests. The Cellular Operators Association of India (COAI has made some crucial recommendations to the government ahead of the Budget to help elevate the telecom sector:
Suspension, reduction of regulatory levies: Telecom companies currently have to pay 5% of the adjusted gross revenue (AGR) as Universal Service Obligation (USO) to the government. COAI wants this levy to be suspended till the existing USO fund is exhausted. It also wants the government to reduce the licence fee to 1% from 3%.
Clarification of services included in telecom activities: COAI has also asked the government to clarify the definition of telecom activities for the purpose of calculation of gross revenue. At present, the term “telecom activities” is not defined, and may include activities which are incidental or ancillary to the primary telecom services. The group wants the government to define telecom activities such that revenue from activities that do not require any licence should not be included for the computation of gross revenue.
Special tax regime for telcos: COAI has asked for the introduction of a special tax regime for the telecom operators under Section 72 of the Income Tax Act, 1961, wherein the business losses can be carried forward and set-off till Sixteen (16) assessment years from the existing 8 years. The organisation has asked the government to extend the period for carry forward of business losses for the telecom sector from the existing 8 years to 16 years. Additionally, COAI wants the rate of tax deducted at source (TDS) under section 194H of the Income Tax Act to be reduced to 1% from the existing 5% for telecom distributors.
Exemption of customs duty on telecom equipment imports: COAI has asked for exemption from the Basic Customs Duty (BCD) charges as it believes that this will be beneficial towards importing essential equipment, which will further help in the deployment and smooth roll-out of 5G in India. At present, a basic customs duty of 20% is charged on import of IP radios, LTE products, optical transport equipment and other telecom equipment. COAI has also urged the Central Board of Indirect Taxes and Customs (CBIC) to direct its field officers to not charge customs duty on cable-laying vessels outside India’s territorial waters
Centralised registration process: For facilitating Ease of Doing Business, COAI has urged for a centralised registration process for the industries having spread in all 36 States/UTs. It has also asked for facilitation of Centralised Assessment, Audit Procedure for large taxpayer units with turnover of over Rs 500 crore and presence in over 12 States/UTs