Reliance Jio, Bharti Airtel and Vodafone Idea have sought an urgent intervention by finance minister, urging the government to boost the liquidity levels of the telecom industry.
In this regard, the telcos have requested the government to offer a combination of soft loans against the goods and services tax (GST) input credits and cut key levies such as licence fees and spectrum usage charges (SUC).
The Cellular Operators Association of India (COAI), in a letter to the finance minister dated June 26, 2020, has underlined the criticality of such pending relief measures, saying these are absolutely essential for the cash-strapped sector to grapple with the adverse economic fallout of Covid19, which continues to spread rapidly across the country.
In its letter, COAI has said that given the adverse impact on the economy and operations of the digital communications industry due to Covid-19, we request that soft loans at a marginal cost lending rate (MCLR) be given to telecom companies using GST input credits as collateral and that the high burden of regulatory levies also be rationalised by reducing licence fee and SUC payouts immediately.
In addition, the telcos have urged the finance minister to expedite steps to cut SUC to 3 per cent of a telco’s adjusted gross revenue (AGR) and reduce licence fees to 3 per cent of revenue from 8 per cent now. Further, the telecom operators have reiterated their demand that all telco payments towards spectrum debt, licence fees and SUC should not be classified as services, and accordingly, must not attract any GST. In addition, they have sought exemption from service tax on the amounts of licence fees and SUC payable in compliance with a Supreme Court (SC) order.