NEW DELHI: The Committee of Secretaries (CoS) is likely to recommend a reduction in the licence fee paid by telecom companies and allowing a two-year moratorium on spectrum payments, as part of measures to grant relief to the debt-laden sector, said three people familiar with the matter.
One of the persons said the panel is set to suggest bringing down licence fee to 5% of adjusted gross revenue from 8%. However, all GST-related matters, including refund of input tax credit and reduction in tax rate, are likely to be referred to the GST Council.
A person familiar with the committee’s thinking said there was consensus within the panel as well as at the highest levels of the government that the telecom market needed three private players, apart from staterun operators.
However, the incumbent telecom operators are unlikely to be satisfied with only these measures, and want the committee — headed by cabinet secretary Rajiv Gauba — to take a speedy call on providing relief on the adjusted gross revenue (AGR)-related dues, said another person.
A senior telecom executive said the government also needed to find a mechanism to raise tariffs which, combined with any relief on AGR-related dues, will be the booster shot desperately needed by an industry singed by a threeyear price war and over Rs 7 lakh crore of debt.
An official said the panel would look at the issue of AGR dues after telcos approach the Supreme Court for relief and the apex court rules on their petitions. Airtel and Vodafone Idea are expected to file review petitions soon.
“The committee is likely to propose lowering the Universal Service Obligation Fund (USOF) component of licence fee to 3% from 5%, and the pure licence fee component to 2% from 3%,” said one of the persons. He added that this would bring down the overall licence fee for telcos to 5% of AGR. USOF comprises 5% of the 8% of AGR that telcos pay as licence fees annually.
Also, “telcos may now need to pay only in FY22 for all payments arising in FY21and FY20”, said one of the persons. This alone could provide over Rs 40,000 crore of relief to the three telcos. GST-related matters such as refund of the Rs 36,000-crore input tax credit or adjusting it against future dues as well as lowering the tax rate to 12% from 18% would be referred to the GST Council, the person said.
Besides Gauba, the high-powered committee includes secretaries of the departments of economic affairs, financial services, revenue, corporate affairs, telecom and IT, besides the CEO of Niti Aayog. The panel last met on Friday, and is believed to have cleared the proposals.
Read more at:
//economictimes.indiatimes.com/articleshow/72031492.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
No comments:
Post a Comment