Telecom Lead India: The telecom players are demanding
lowering of taxes on the sector, saying that the levies in India are among the
highest in the world, which is affecting investments and revenues of the
sector.
Telecom players such as Bharti Airtel and MTS have also
expressed their views on tax rebates, along with ‘infrastructure sector’ status
for telecom business in this year’s union budget.
The Budget will be presented in the Parliament on January
16 and it is expected to take measures to promote the growth in the telecom
sector. Ashok Aggarwal, Director- General, Telecom Equipment
Manufacturers’ Association (TEMA) shares TEMA’s expectations from 2012-2013
Budget:
Like every other year and every other sector, all eyes
are glued to the unveiling of Union Budget 2012- 2013. Telecom Equipment
Manufacturers’ Association (TEMA) has a long expectation from this budget on
behalf of the telecom industry and demanding concrete provisions this time from
the budget.
The budget should spur the growth of the telecom industry
by nursing issues that have been neglected for years together. What is needed
is a strong regulatory foothold on certain issues which have been unattended
and partially attended by the government for years together due to which we are
finding the telecom equipment industry not growing the way it can.
Firstly, there should be a call for infrastructure
status. Over and above the concerns on high tax structure in the Indian Telecom
industry, telecom infrastructures companies are not able to get long term
benefits from entities such as India Infrastructure Fund and other at the
moment as the Indian telecom equipment manufacturing are not categorized as an
infrastructure industry. By getting classified as an infrastructure, benefits
pertaining to this segment can be availed by the telecom
manufacturers which in turn can ease the availability of funds.
Secondly, for further accelerating the growth of the
telecom sector and to ensure an affordable tariff to consumers, there is a need
to re-examine the multiple taxes and levies applicable to it. There should be
deferment of excise and VAT for the minimum period of 5 years for all the
Indian product companies and preferential market access should be mandated for
the Indian products.
Thirdly, accelerating the growth of broadband across the
country should also be the priority of the government. Abolition of service tax
on internet/broadband services would make such services affordable to masses,
particularly in rural and remote areas. It would help to bring down the cost of
such services to the end users. Such abolition would help the government to
meet the target of internet/broadband penetration across India.
Fourthly, there should be an establishment of R&D
corpus to support the R&D and IPR creation in the industry which will help
incentivized the license service providers to meet the mandated target of
purchased of domestic manufactured products.
Fifthly, there should be credit of service and the
clarification should be inserted in the definition of -input services’ to
provide that -civil structure’ does not include erection of tower and other
telecom infrastructure by the telecom service provider.
To sum it up, TEMA is looking forward to the following
points:
a. Indian products and
manufacturing companies should be provided deferred excise / vat payment to
bring parity.
b. Availability of long term
capital financing and working capital at competitive interests rates as are
available worldwide (labor + 0.5 percent be ensured.
c. Income tax exemption for Indian
product companies for a period of 5 years should be provided on the lines for
software exports.
d. Deferred payment of excise and
VAT for a period of 5 years to be provided for the -Indian Products’
manufacturing companies.
