Representatives from the Cellular operators Association of India (COAI) and the Association of Unified Telecom Service Providers of India (AUSPI) reportedly held a meeting with officials from the Ministry of Finance to request for infrastructure status for the telecom sector.
Rajan Mathews, director general, COAI commented, “An infrastructure status would provide us with beneficial treatment with regard to infrastructure bonds and make financing easier.?
Apart from income tax exemptions, an industry counted in the infrastructure sector, is allowed to borrow funds from overseas. They are even provided easy credit in domestic banks. The associations also discussed tax-related issues concerning the sector.
The telecom industry has been demanding lowering of taxes on the sector, on grounds that the levies in India are among the highest in the world and with tariffs as low as Re 0.05 per second, revenues are falling, thereby affecting investments in the sector.
Telecom companies are paying up to 10 per cent annual licence fee, besides 8 per cent spectrum charges and contribution towards the Universal Service Obligation (USO) Fund as a percentage of adjusted gross revenue.
