NEW DELHI: Reliance Jio, the country’s biggest telecom operator, has petitioned the government to reduce the taxation on the Indian telecom industry ahead of spectrum auctions, and said that overall levies need to be brought down as the sector is under “severe duress” and needs the attention of the government.
Mathew Oommen, president of Jio, said that license fee on telecom companies should be brought down to 1%, against the 8% now, while the Rs 35,000 crore worth of GST refunds and Rs 50,000 crore of money the government holds in USOF (Universal Services Obligation Fund) kitty should be used to reduce the stress of the industry.
“The sector needs attention, and there is no question about this. Also, there is a need to do away with multiple taxes that we are paying,” Oommen said when asked whether a relief package is required.
Asked if the telecom sector needs reforms, he said, “I absolutely feel that the sector needs reforms. The sector is taxed anywhere between 30-32%, which is very high.”
Speaking about the taxes, Oommen said that while there is GST of 18%, the companies also pay another 8% as license fee.
He said the government should look at effective usage of idle cash. “For example, you have more than Rs 50,000 crore sitting in USOF. Should we not defer the charging of further USOF levy till that money gets exhausted, or can’t we have capital-efficient use of that money? I think the sector will benefit hugely from it. This money is sitting idle and doing nothing. This money can be used to jumpstart the industry and carry out work on many India-centric digital activities.”
Speaking about participation in the upcoming spectrum auctions, the Jio president said that the company wants an easier taxation regime. “At least for new airwaves that you sell, have a license fee of 1%. We just want that the government does not use the spectrum usage charge (SUC) levy as a tool to put additional burden on the industry.”
Source- Time of India.