Mumbai: India should rationalise the multiple taxes and duties levied on the telecoms sector in the federal budget this year to help reduce the cost of services, an industry body said on Monday.
Finance minister Pranab Mukherjee will present the federal Budget on 6 July.
Taxes, including annual licence fees, usage charges for spectrum, microwave access, and service tax, ate up almost 24-30% of the operators’ adjusted gross revenue, the Cellular Operators’ Association of India (COAI) said.
As a first step towards rationalisation, COAI has sought a uniform license fee of 1% of adjusted gross revenue, excluding universal service obligation fees, across all segments of telecom.
COAI has also sought tax break extensions for the telecom industry, at par with other infrastructure sectors, to aid further expansion of affordable services.
It said telecom operators should be be able to claim tax breaks for 20 years. Out of this, COAI said, operators should be eligible to claim a 100% exemption on taxable profits for 10 successive years.
Currently, a telecom operator is entitled to a 100% tax break for 5 years, followed by a 30% relief on profit for the next 5 years during the initial 15 years when commercial operations start.
It has also sought doing away with the current rule that requires subscribers to quote PAN, or personal account number, at the time of acquiring a mobile connection, as several low-end rural subscribers do not have a PAN number.