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COAI pushes for input tax credit on spectrum usage charges and licence fee

February 12, 2018

The Cellular Operators Association of India (COAI) plans to lobby the government to consider spectrum usage charges and licence fee paid to the Department of Telecommunications (DoT) as tax to enable operators to claim input tax credit on the same.

At present, DoT calculates levies payable by operators on the basis of adjusted gross revenue. This has been a contentious matter in the sector and has been under litigation as operators feel that AGR should comprise only revenue from telecom services. However, the DoT insists on the inclusion of all revenue generated by an operator, including that from non-core operations in the AGR. Telecom operators are liable to pay around 3-5 per cent and 8 per cent of the AGR as spectrum usage charges and licence fees, respectively.

According to the COAI, the methodology of treating the levies as tax will lead to only telecom associated revenue getting taxed. It also believes that operators will be able to benefit from input tax credit if the proposal is accepted by the government.

To this end, the COAI plans to hire a consultancy to frame a detailed proposal to submit to the Telecom Regulatory Authority of India for review.



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