The Cellular Operators’ Association of India (COAI) has written to the finance minister Nirmala Sitharaman seeking urgent relief measures for the sector amid COVID-19 outbreak.
In a letter dated March 28, 2020 to the finance minister, COAI has requested lowering of levies with immediate effect, for telecom operators on account of the adverse impact of COVID-19. The industry body has also sought a cut in spectrum usage charge (SUC) and licence fee contribution/Universal Service Obligation Fund (USOF) contribution by 3 per cent and 5 per cent, respectively.
Further, taking liquidity in consideration, COAI has requested for the refund of unutilised input tax credit immediately, or else grant of soft loan at marginal cost of funds based lending rate (MCLR) to companies, using the goods and services tax (GST) input credit as collateral. It also urged the minister to exempt the levy of GST on licence fees, spectrum usage charges and payment of spectrum acquired in auctions.
As per COAI, service tax should be exempt on amount of licence fee and spectrum usage charges payable by telecom operators, in compliance with the Supreme Court order.
According to the industry body, despite COVID-19 outbreak, operators are playing a critical role in addressing the challenges faced by individuals, corporates, governance services, emergency and utility services. Further, it asserted that ensuring continuity of these services is of utmost importance in these challenging times.
Additionally, the industry body added that there has been a severe disruptive impact on the global supply chain, demand and supply elements as well as cash flows of the companies due to the slowing economic activities. This downturn will have an impact on all payments including those of employees, interest, loan repayments and taxes.