As per industry sources, the Department of Telecommunications (DoT) has asked the finance ministry to consider refunding the input tax credits (ITC) of telecom companies accumulated under the goods and services tax (GST) regime.
Following internal consultations, reportedly, the communications ministry sent the recommendation (a standalone recommendation) to the Department of Economic Affairs.
As per provisions of the law, telcos cannot utilise GST credits. Refunding them will require an amendment to the GST Act as presently there is no such provision in the law. It has, therefore, been sent to the finance ministry. The recommendation may be taken up for budget discussions within departments. An amendment to the GST Act can be effected after the approval of the council, which will need the approval of states.
Earlier, telcos have reiterated that the government should refund the tax credits on telecom gear or adjust the amount against their statutory dues.
