![COAI Releases Telecom Industry Suggestions for Union Budget 2024-25](https://img-cdn.thepublive.com/fit-in/1280x960/filters:format(webp)/dqc/media/media_files/eHLcDNGzqt8WBHq2bNvD.png)
Cellular Operators Association of India recommendations for the Union Budget 2024-25
The Cellular Operators Association of India (COAI) has submitted its recommendations for the Union Budget 2024-25 to the Ministry of Finance, Government of India. These recommendations aim to improve the financial health of the telecom sector, supporting the Government’s mission of digital empowerment and inclusivity. Key points are as follows:
Abolish Regulatory Levies – USOF and AGR
COAI recommends abolishing the Universal Service Obligation Fund (USOF) levy or suspending the 5% USO contribution of Adjusted Gross Revenue (AGR) until the existing USO corpus is used up. They also suggest reducing the License Fee from 3% to 1% to cover administrative costs, relieving Telecom Service Providers (TSPs) of additional financial burden. Additionally, COAI calls for a precise definition of Gross Revenue (GR) to exclude revenue from non-licensed activities.
Exemption of Service Tax on Additional AGR Dues
COAI emphasizes the need to exempt Service Tax on additional AGR liabilities arising from the Supreme Court judgment. They request relief for the period from April 2016 to June 2017 and propose a streamlined process for claiming a cash refund of Service Tax paid under the Reverse Charge Mechanism (RCM).
Exemption of Customs Duty
COAI recommends reducing customs duties on telecom equipment to zero and gradually increasing them based on the development of domestic manufacturing. They urge a reduction in customs duties for 4G and 5G network products to NIL until high-quality domestic equipment is available at competitive prices.
Exemption of GST
COAI calls for an exemption from GST under RCM on payments to the Department of Telecommunications (DoT) for License Fees, Spectrum Usage Charges, and Spectrum acquired in auctions. This exemption would prevent further accumulation of Input Tax Credit (ITC) and release blocked working capital. Alternatively, COAI proposes allowing RCM payments using the ITC balance in the Electronic Credit Ledger.
Custom Duty Exemption for Cable Repair/Installation Operations in EEZ
COAI requests extending the customs duty exemption for vessels engaged in laying submarine cables in India, set to expire on September 30, 2024. This extension is necessary to prevent increased cable-laying costs and ensure the quality of future submarine cable deployments.
Lt. Gen. Dr. S.P. Kochhar, Director General, COAI, said, “Over the past decade, the Government of India has undertaken several reformative steps to fuel India’s digital ambitions and achieve accelerated growth. The telecom industry plays a pivotal role in this transition providing affordable connectivity and inclusivity. Thus, reducing the TSPs’ levy burden and facilitating investment opportunities are not just an economic necessity but a strategic investment for the country’s future. We hope the government will consider these recommendations in the upcoming budget and help the industry navigate through these prolonged challenges. With 5G expected to catalyze digital transformation across sectors, we also urge the government to prioritize telecom infrastructure development. By doing so, the new government can set a precedent for visionary policymaking, driving India towards a robust digital future.”
The industry anticipates that the GST Council will consider the recommendations put forth by COAI, as they are essential for improving the ease of doing business and restoring the financial health of the telecom sector.