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Non-availability of CENVAT credit under GST regime to impact financial health of telecom sector, says TAIPA

May 22, 2017

According to the Tower and Infrastructure Providers Association (TAIPA), the non-availability of input tax credit (CENVAT credit) to tower infrastructure providers under the new goods and services tax (GST) regime would have a huge impact on the cost of services and billing by infrastructure providers (IPs) to telecom service providers. Further, according to TAIPA, this burden would either be passed on to consumers or would further add on to the huge debt of operators due to the hyper-competitive nature of the market.

As per TAIPA, the primary objective of the government to introduce GST was to ensure that there was no cascading of taxes. However, a higher tax rate and non-availability of CENVAT credit would defeat the whole purpose ‘One Nation, One Market, One Law’.

Moreover, such a move by the government would further impact the infrastructure rollout in semi-urban areas and rural areas that require immediate digital connectivity, TAIPA said.



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