Telcos search service tax waiver on AGR dues

NEW DELHI: Telecom operators’ physique COAI has approached the finance ministry looking for waiver of service tax on adjusted gross income (AGR) dues to be paid to the federal government.
The telecom operators have been paying service tax after which GST below the reverse cost mechanism (RCM) on licence charges (LF) and spectrum utilization prices (SUC) made to the division of telecom (DoT) for the interval beginning April 1, 2016.
The business paid round Rs 6,600 crore between April 2016 to March 2017 in money to discharge its output service tax legal responsibility, the Mobile Operators Affiliation of India (COAI) stated in a letter to the ministry dated July 17.
“Telecom sector shouldn’t be burdened with service tax legal responsibility attributable to incremental LF and SUC payable pursuant to the SC choice, as it’s going by way of difficult instances,” COAI Director Common S P Kochhar stated within the letter.
When contacted, COAI didn’t touch upon the matter.
The business physique’s members embody Reliance Jio, Bharti Airtel and Vodafone Thought.
The Supreme Court docket had in October final yr upheld the federal government’s place on together with income from non-telecommunication companies for calculating the annual AGR of telecom firms, a share of which is paid as licence and spectrum charges to the exchequer.
Kochhar stated whole service tax payable below RCM on licence charges and spectrum utilization prices, even after contemplating incremental demand because of the apex courtroom choice, would have been lower than Rs 2,000 crore.
COAI stated had the business identified in regards to the incremental demand of LF and SUC, it could have thought-about the identical for computing the quantity to be paid below RCM.
Consequently, the output service tax legal responsibility paid in money at the moment would have diminished by a corresponding quantity.
“The business is a entrance runner in contributing to the Indian economic system by way of fee of charges, taxes, producing employment and so forth. This can be evident from the truth that within the final 5 years, telecom operators have cumulatively paid service tax and GST of roughly Rs 2 lakh crore,” Kochhar stated.
In response to COAI, along with the taxes, telecom gamers have paid regulatory charges within the type of LF and SUC of roughly Rs 87,000 crore within the final 5 years.
COAI stated the telecom sector employs virtually 22 lakh folks straight and 18 lakh not directly. It has the second largest non-public sector funding in infrastructure at about Rs 11 lakh crore.
“Contemplating the criticality of this sector to the general economic system and ecosystem, it mustn’t solely be secured from any hostile affect however be prolonged some consideration, particularly the place the reduction doesn’t end in any lack of tax to the federal government,” Kochhar stated.
COAI stated the business debt as on March 31, 2019 stood at Rs 6.7 lakh crore. AGR has declined by about 14 per cent from Rs 39,585 crore for the quarter ended March 2017 to Rs 34,136 crore for the quarter ended March 2019.
“The request to not implement Service tax legal responsibility within the given case can be made on account of the truth that being income impartial, it doesn’t trigger any lack of tax to the federal government. If such Service tax is to be paid, it could additional block the working capital,” Kochhar stated.

Leave a Reply

%d bloggers like this: