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Government considers replacing multiple charges imposed on operators with a unified levy

July 11, 2018

The finance ministry has said that there might be a replacement of multiple charges imposed on telecom companies with a single levy but any recast will have to be revenue neutral.

The finance ministry and the Department of Telecommunications (DoT) are examining levies such as the spectrum usage charge (SUC), licence fees, Universal Service Obligation Fund (USOF) levied on telecom companies. They want to see if these can be replaced with a unified levy.

The government has budgeted Rs 486.61 billion as revenues from other communications services in financial year 2019, while it had budgeted Rs 307.36 billion in financial year 2018. This mostly includes licence fees from telecom operators and receipts on account of spectrum usage charges.

As per the telecom companies, they already pay market price for spectrum and the government levies account for over a third of revenue and, therefore, should be lowered.

Under the National Digital Communications Policy, 2018, DoT said it plans to optimally price spectrum, review licence fees and SUC since spectrum is a key natural resource used for public benefit. However, the finance ministry is not in agreement with this and said that the revenue is needed to meet social spending.



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