The FY25 Union Budget session is scheduled to be held on 31 January, with union finance minister Nirmala Sitharaman set to present the upcoming financial year’s budget on 1 February.

Industry observers said that the realization of such relief is in line with the progress of the nature of services provided by companies in the industry right now. SP Kochhar, director-general of Coai, said, “The recent forward-looking reforms signal a positive intent towards a robust and future-ready telecom sector, capable of fueling India’s digital ambitions. But to fully realize this potential, we must address the financial constraints impeding the sector’s expansion. Reducing levy burdens is not just an economic necessity, but a strategic investment in our digital future. By allocating adequate resources for 5G rollout, network expansion and fiberization in the upcoming budget, the government can unlock this critical sector’s full potential.”

Alongside traditional data services, the telecom industry is also at the cusp of the advent of satellite-driven communication services, which is set to begin once the Centre commences administrative satellite allocation that the newly notified Telecommunications Act, 2023 has formalized. Telcos are also contending with the advent of direct-to-mobile (D2M) broadcasts, which seeks to bring television broadcasts directly to smartphones. While telecom operators have claimed that such a service will hurt the sector’s revenue potential, the Secretary of the Ministry of Information & Broadcasting (I&B), said on Tuesday that the Centre is planning to commence a pilot test of the technology in the coming months.

Other sops asked for by the telecom industry from the FY25 Union Budget include exempting the levy of service taxes “on assignment of right to use natural resources” by operators, reducing customs duty on import of telecom equipment to zero from 20%, extending exemptions granted to vessels laying submarine cables, and exemption of Goods and Services Tax (GST) on license fees, spectrum usage charges and spectrum acquisition fee.

“Payment of GST in cash on a reverse charge basis and subsequent Input Tax Credit (ITC) utilization has resulted in substantial accumulation of ITC within telecom companies, leading to a significant blockage of working capital, thereby imposing a substantial financial burden on these companies. Telcos are urging for an exemption from GST under RCM on payments related to these charges, which would alleviate the financial strain by preventing further ITC accumulation and releasing blocked working capital,” a statement by the body further said.

Source from: https://www.livemint.com/industry/telecom/telco-body-seeks-usof-tax-reliefs-in-fy25-union-budget-11705603610343.html

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