Telcos recommend for better tax regime in Budget

  • January 19, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
No Comments

 

 

Telcos recommend for better tax regime in Budget

Subject : Economy

Section : Fiscal Policy

Concept :

  • Telecom service providers (TSPs), on Wednesday, sought a reformative tax regime for the industry in the upcoming Budget, and said Universal Service Obligation (USO) contribution of five per cent of adjusted gross revenue (AGR) may be suspended till the existing USO corpus is exhausted.
  • The Cellular Operators Association of India (COAI) also said that the licence fee be brought down from three per cent to one per cent at the earliest, to cover only administrative costs by the Department of Telecommunications (DoT)/ government.
  • COAI has requested to introduce a special regime for the telecom operators under Section 72 of the Income Tax Act, 1961, wherein the business losses can be carried forward and set-off till Sixteen (16) assessment years from the existing 8 years.
  • COAI is the apex body that represents the telecom sector.

Gross Revenue

  • The present definition of Gross Revenue (GR) includes revenue from all telecom activities.
  • The term telecom activity is not defined but may include revenue from activities believed to be incidental to telecom activity.
  • It is requested that the definition of GR should make it abundantly clear that the revenue from activities for which no license is required, should not be a part of GR.

Universal Service Obligation

  • The New Telecom Policy – 1999 (NTP’99) provided that the resources for meeting the Universal Service Obligation (USO) would be raised through a ‘Universal Access Levy (UAL)‘, which would be a percentage of the revenue earned by the operators under various licenses.
  • The Universal Service Support Policy came into effect from 01.04.2002.
  • The Indian Telegraph (Amendment) Act, 2003 giving statutory status to the Universal Service Obligation Fund (USOF) was passed by both Houses of Parliament in December 2003.

Universal Service Obligation Fund (USOF):

  • USOF ensures that there is universal non-discriminatory access to quality ICT (Information and Communications Technology) services at economically efficient prices to people in rural and remote areas.
  • It was created under the Ministry of Communications in 2002.
  • It is a non-lapsable fund, i.e., the unspent amount under a targeted financial year does not lapse and is accrued for next years’ spending.
  • All credits to this fund require parliamentary approval and it has statutory support under Indian Telegraph (Amendment) Act, 2003.
economy Telcos recommend for better tax regime in Budget