COAI Recommends Abolishing USOF Funds and Extra to Govt forward of Funds

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The telecom trade physique, COAI (Mobile Operators Affiliation of India), has advisable that the federal government abolish the 5% USOF (Common Service Obligation Fund) contribution rule for the telcos. Alternatively, the physique mentioned that the federal government ought to make the USOF contribution for the telcos nil till the prevailing corpus of Rs 80,000 crore is utilised absolutely. At current, the telcos pay 5% of their adjusted gross income (AGR) in the direction of USOF. As well as, there’s one other 3% of AGR paid as license charges. This, the trade physique has requested to be introduced all the way down to 1%.

COAI has additionally advisable that the Authorities of India (GoI) ought to enable telecom gamers to hold ahead losses as much as 16 years from the present rule of 8 years. The physique highlighted that many firms have shut down since 2017 and the Supreme Courtroom determination on the AGR matter has adversely affected the trade and its gamers. Permitting carry ahead of losses as much as 16 years might be good for the trade, recommended COAI.

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There’s additionally a request to exempt the service tax on extra AGR dues. The Supreme Courtroom’s order has put an extra burden of AGR dues on the telcos, and this has negatively affected the cashflow of those firms. Thus, COAI is asking the federal government to exempt the telcos from paying service tax on the extra AGR dues.

The Indian telecom operators should pay a 20% customs responsibility on the tools they’re importing from outdoors. COAI has requested for this to be introduced all the way down to zero. It would assist with a good quicker rollout of 5G and gasoline the expansion of the telecom trade. The trade physique has additional requested that GST be exempted from funds for license charges, spectrum utilization costs (SUC) and spectrum acquired in auctions. It is because the telcos make the GST fee beneath RCM (reverse cost mechanism) for such issues. Thus, the enter tax credit score (ITC) is accrued for the telcos, which solely blocks their capital in the meanwhile.

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The present customs responsibility exemption for vessels engaged in laying submarine cables in India is about to run out on September 30, 2024. The federal government should intervene urgently to increase this exemption to forestall a rise in cable-laying prices, mentioned COAI.