Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi), the top telecom operators in India, want the government to remove the Universal Service Obligation Fund (USOF) from the upcoming budget to reduce the burden on their business. USOF was established to financially support the rollout of telecom services in the rural areas of the country. But the telcos have to shell out a significant sum of money towards the fund at regular intervals, and it is hurting their cash flow. According to a PTI report, the telecom operators also want the input tax credit (ITC) of around Rs 35,000 crore to be returned by the government. The Cellular Operators Association of India (COAI) has asked for the refund of unutilised ITC of Rs 35,000 crore that cannot be put to use in the near future.
Telcos Request the Government to Waive GST of LF and Reduce Levies
To get further ease with their finances, the telcos have asked the government to waive off the Goods and Services Tax (GST) from the license fees and the spectrum usage. Along with this, the telcos have requested a reduction in levies in the upcoming budget. It is worth noting that the government has already removed plenty of charges for the telcos that was included in the adjusted gross revenue (AGR) dues and also abolished the spectrum usage charges (SUC) for the frequencies that the telcos purchase in future auctions. The current license fee for the telcos is 8% of their AGR. Out of the 8%, the 5% fee is for USOF. COAI wants the USOF fees to be removed from the upcoming budget. The government last year came out with a relief package for the telecom sector, which gave the struggling operators some room to breathe. There’s still a long way to go for fixing the reforms in the sector, and the government is working on that with the relevant stakeholders.
