India telecom budget recommendations from COAI Rajan Mathews

Telecom Lead India: The Cellular Operators Association of
India (COAI) has submitted its recommendations for the 2012-2013 Union
Budget to the ministry of Finance.

COAI is the largest representation body for telecom players
in India.

The key recommendations are the following:

*     CENVAT credit of central excise duty be
made available to towers and shelters

*  To exempt from service tax the earnings
of distributors from distribution of telecom services

*   Appropriate clarification on the
applicability of service tax in Jammu & Kashmir, taking into account the
General Sales Tax being paid on specified services in J&K, so as not to
have dual levy of tax on services

*  OFC (Optic Fibre Cables), being a vital
component of telecom infrastructure and a key one for the NTP 2012 objectives,
should be classified under tariff chapter heading 85 attracting Nil rate of
basic customs duty

*  Government should introduce a new section
to deal with the case of deduction of tax at source by the telecom operators
from the discounts offered to distributors

*   Since the requirement of quoting the PAN
number at the time of taking a mobile connection, as per the Rule 114B(g) of
the Income Tax Act becomes an inhibitor/hurdle for spread of service to low end
/ rural subscribers, the Government should delete Rule 114B(g) of the Income
Tax Rules

There are several other recommendations made by COAI which
focus on simpler and more efficient procedures for the industry and are
targeted at effective utilization of resources and policies to ensure holistic
development and growth of the sector in line with the government’s vision as
presented in the draft National Telecom Policy 2012.

COAI is hopeful that due consideration would be paid to the
recommendations submitted and a balanced approach towards the budget would be
taken by the minister,” said COAI secretary general Rajan Mathews.

Also see Budget expectation of Jaideep Ghosh, partner – Advisory, KPMG for Indian telecom sector .

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