According to an internal note being circulated in the Department of Telecommunications (DoT), rationalisation of levies is amongst the department?s top priorities. The department is also set to approach the finance ministry for a reduction or even an exception on the 10.3 per cent service tax that consumers are charged on their mobile and landline bills.
Indian operators pay about 31 per cent of their total revenues towards different forms of taxes, which is among the highest in the world, against the global average of 17 per cent, according to both government and industry estimates.
Prior to this, the Telecom Regulatory Authority of India (TRAI) had, in May 2010, suggested that the licence fee be reduced gradually over the next four years to 6 per cent. TRAI had said the move would allow the industry to save about Rs 64.42 billion.
At present, operators share between 6-10 per cent of their revenues with the government. The licence fee is highest at 10 per cent for the metros and category A regions, which include lucrative states such as Tamil Nadu, Andhra Pradesh and Maharashtra among others.
TRAI?s proposal involved reduction of licence fee in metros from 10 per cent currently to 9 per cent in 2011-12, 8 per cent in the year after, then 7 per cent and then 6 per cent in 2013-14. In category A circles, where operators are currently pay 10 per cent, TRAI had suggested that this be reduced by 1 per cent each year to be at 6 per cent by 2014.
