NEW DELHI: The federal government on Monday amended the telecom licence norms to scale back the tax burden on telecom operators by exempting all non-telecom revenues, revenue from dividends, curiosity, property sale and lease, amongst others, for calculation of levies like licence charges and spectrum utilization costs.
The modification kinds a part of the telecom bundle introduced not too long ago by the Centre.
The outdated definition of adjusted gross income (AGR) upheld by the Supreme Courtroom had led to a burden of round Rs 1.47 lakh crore on working telecom service suppliers, together with Bharti Airtel and Vodafone Concept, and pushed the sector into deep monetary disaster.
The exempted sources of income earned by telecom operators will likely be deducted from their gross income to calculate relevant adjusted gross income (ApGR), as per amendments revealed by the Division of Telecom (DoT) on Monday.
Thereafter, already exempted classes underneath outdated guidelines like roaming revenues, interconnection costs and items and providers tax income will likely be deducted to reach on the remaining AGR on which the federal government calculates its share of income.
“This modification comes into impact from October 1, 2021 and will likely be relevant to the dues which come up from the operations of the licensee after the mentioned date,” the DoT mentioned.
In response to a modern report by sector regulator Trai, telecom operators’ gross income declined by 3.08 per cent to Rs 64,801 crore in April-June 2021 quarter however their AGR, on which levies are imposed, elevated by 16.33 per cent on a year-on-year (YoY) foundation to Rs 51,335 crore, as per the outdated system.
The licence charges and spectrum utilization costs (SUC) elevated by 16.36 per cent and 20.2 per cent to Rs 4,103 crore and Rs 1,646 crore, respectively, on YoY foundation.
The exemption of a number of sources of non-telecom income is anticipated to scale back the levies considerably.
The opposite sources of telecom operators’ incomes that will likely be exempted from gross income to calculate ApGR embrace receipts from common service obligation (USO) fund, revenues from actions underneath a licence issued by the Ministry of Info and Broadcasting, beneficial properties from international trade charges fluctuations, insurance coverage claims, dangerous money owed recovered and extra provisions written again.
The federal government, as a part of the telecom reforms introduced in mid-September, has already rationalised the rate of interest for delayed fee of licence price, a transfer that’s anticipated to ease monetary burden on the telecom sector and promote ease of doing enterprise.
The division will now cost 2 per cent curiosity, in comparison with 4 per cent levied earlier, above the one-year marginal value of lending price (MCLR) of State Financial institution of India (SBI) for delay in fee of licence charges or another statutory dues. The curiosity will likely be compounded yearly.
Telecom operators may also not be charged a penalty equal to 50 per cent of the brief fee they made for the licence charges. The penalty was imposed if brief fee was greater than 10 per cent of the payable licence charges.
Of the overall AGR dues of Rs 1.47 lakh crore, round 74 per cent is on account of curiosity, penalty and curiosity on penalty.
Whereas the telecom reforms have allowed operators to pay the steadiness 90 per cent AGR dues after 4 years of moratorium (however throughout the stipulated time interval of 10 years), the federal government can be offering aid to the businesses by implementing measures to scale back the monetary burden on them.
The modification kinds a part of the telecom bundle introduced not too long ago by the Centre.
The outdated definition of adjusted gross income (AGR) upheld by the Supreme Courtroom had led to a burden of round Rs 1.47 lakh crore on working telecom service suppliers, together with Bharti Airtel and Vodafone Concept, and pushed the sector into deep monetary disaster.
The exempted sources of income earned by telecom operators will likely be deducted from their gross income to calculate relevant adjusted gross income (ApGR), as per amendments revealed by the Division of Telecom (DoT) on Monday.
Thereafter, already exempted classes underneath outdated guidelines like roaming revenues, interconnection costs and items and providers tax income will likely be deducted to reach on the remaining AGR on which the federal government calculates its share of income.
“This modification comes into impact from October 1, 2021 and will likely be relevant to the dues which come up from the operations of the licensee after the mentioned date,” the DoT mentioned.
In response to a modern report by sector regulator Trai, telecom operators’ gross income declined by 3.08 per cent to Rs 64,801 crore in April-June 2021 quarter however their AGR, on which levies are imposed, elevated by 16.33 per cent on a year-on-year (YoY) foundation to Rs 51,335 crore, as per the outdated system.
The licence charges and spectrum utilization costs (SUC) elevated by 16.36 per cent and 20.2 per cent to Rs 4,103 crore and Rs 1,646 crore, respectively, on YoY foundation.
The exemption of a number of sources of non-telecom income is anticipated to scale back the levies considerably.
The opposite sources of telecom operators’ incomes that will likely be exempted from gross income to calculate ApGR embrace receipts from common service obligation (USO) fund, revenues from actions underneath a licence issued by the Ministry of Info and Broadcasting, beneficial properties from international trade charges fluctuations, insurance coverage claims, dangerous money owed recovered and extra provisions written again.
The federal government, as a part of the telecom reforms introduced in mid-September, has already rationalised the rate of interest for delayed fee of licence price, a transfer that’s anticipated to ease monetary burden on the telecom sector and promote ease of doing enterprise.
The division will now cost 2 per cent curiosity, in comparison with 4 per cent levied earlier, above the one-year marginal value of lending price (MCLR) of State Financial institution of India (SBI) for delay in fee of licence charges or another statutory dues. The curiosity will likely be compounded yearly.
Telecom operators may also not be charged a penalty equal to 50 per cent of the brief fee they made for the licence charges. The penalty was imposed if brief fee was greater than 10 per cent of the payable licence charges.
Of the overall AGR dues of Rs 1.47 lakh crore, round 74 per cent is on account of curiosity, penalty and curiosity on penalty.
Whereas the telecom reforms have allowed operators to pay the steadiness 90 per cent AGR dues after 4 years of moratorium (however throughout the stipulated time interval of 10 years), the federal government can be offering aid to the businesses by implementing measures to scale back the monetary burden on them.
Supply: Times of India