Telecom operators urge Centre to replace all taxes with 6% single levy
May, 31st 2007
Telecom operators have urged the Department of Telecom to bring down all levies imposed by the Central Government on the operators to six per cent of their annual revenues.
In a meeting with the Department of Telecom, both GSM and CDMA operators gave a joint presentation highlighting the huge burden on the industry. This comes even as the Prime Minister, Dr Manmohan Singh, recently said that the Government was committed to introduce a single levy on telecom operators.
Currently, telecom operators pay between six and 10 per cent of their annual revenues as licence fees. Then they also pay spectrum charges, service tax and other local taxes such as octroi and stamp duties to various State Governments.
While the levies charged by the State Government may not be tampered with, the operators said that all levies and duties being charged by the Central Government should be replaced with a single levy that is not more than six per cent of their annual revenues.
Revenues for the Government from licence fee alone has increased from Rs 4,080 crore in 2002-03 to Rs 10,869 crore in 2006-07. This is expected to go up to Rs 13,215 crore during the current financial year.
Operators said that even if the charges were brought down to six per cent, the Government would not lose any revenue due to growth in the operator's revenues.
They also said that the Government would do well to reduce the financial burden on operators, as it would enable cheaper telephone to rural consumers.
This is the second time that both GSM and CDMA operators have come together under the banner of the Apex Advisory Council for Telecom (ACT) on any issue.
The ACT was initially formed by the industry to tackle issues related to subscriber verification and the security concerns arising out of it.