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India’s telecom sector stands on the cusp of a revolution, driven by the rollout of 5G, Production Linked Incentive<\/a> (‘PLI’) Scheme and the draft Telecom bill aiming to replace three archaic Telecom laws. The Government is going full throttle with a multi directional impetus through numerous policy<\/a> initiatives including moratorium on regulatory dues of operators, rationalization of Adjusted Gross Revenues<\/a> (‘AGR’) or 100% FDI through the automatic route. In the days to come, one hopes this momentum continues with the rationalization of the Universal Service Obligation Fund (‘USOF’) (i.e., reduction in the levy pending disbursement of unutilized funds) and greater clarity on certain aspects of the newly introduced Applicable Gross Revenue (‘ApGR’) (i.e., defining Telecom Activity to mean licensed activities only).
Budget 2023<\/a>, in my view should be around entailing a greater alignment of the tax policies with the ground realities of the Telecom business.
One such reality is that the sector is capital intensive and demands frequent upgradation of network infrastructure to keep pace with the rapidly changing technology. This invariably results in huge accumulated losses. However, in prescribing a threshold of eight years, the provisions relating to carry forward and set off of losses follow a ‘one size fits all’ approach, disregarding the nuances and peculiarities of different businesses. Perhaps, a case to consider extending this threshold to a period of 12-16 years to allow Telecom companies adequate time to claim these losses.
The situation is somewhat similar in case of carry forward and set off of losses in case of amalgamation. The law stipulates the amalgamated company to hold 75% of the book value of the assets for a period of 5 years. Interestingly, this very time frame is stipulated for, inter alia, Banking, Manufacturing, Public Sector Undertakings, Software, Electricity and Mining companies. Clearly these businesses are significantly different from each other – thus a need to consider relaxing this threshold for the Telecom business.
The sector continues to get plagued with litigation and contesting them is a drain on the resources of all stakeholders. A case in point is TDS on the discount on Recharge Vouchers to the distributors wherein the aggrieved Telecom companies argue that TDS under section 194H @ 5% is not warranted since the transaction is on a principal-to-principal basis and not principal to agent. A 5% TDS has a crippling effect on the margins of the distributors. In my view, the issue could possibly be resolved by reducing the TDS rate from 5% to 1%.
‘Make in India’ is the cornerstone of the country’s ‘Atmanirbhar Bharat’ ambition and the PLI Scheme is a powerful engine to enable that. Therefore, the success of PLI scheme in Telecom cannot be overestimated. The other state incentives are supplementing this scheme well and providing multiple options to the companies to set up manufacturing facilities. However, it would be imperative that these initiatives are duly supplemented by addressing some teething issues of operators and Infrastructure providers which are blocking their working capital and causing immense hardship.
Whether mobile towers and shelters are immovable or not is casting a shadow on the eligibility of their ITC. While that debate continues, the other avoidable debate brewing is on the network equipment installed on these towers, which are clearly movable. The issue here is that whether the provision and the principle under which ITC is blocked on immovable property can equally apply to the network equipment on those towers? Budget 2023<\/a> should clarify on both the counts.
Currently, GST is being paid by the operators under Reverse Charge Mechanism (‘RCM’) on supplies by Government, more particularly on Spectrum Acquisition Fees, License Fee (‘LF’) and Spectrum Usage Charges<\/a> (‘SUC’). ITC arising out of this is creating huge imbalance with outward liabilities. Since this is revenue neutral for the Government, appropriate clarification may be issued exempting the levy of GST on such fees and charges. Alternatively, payment under RCM on Government Services from ITC balance could be permitted.
In summary, the success of the roll out of 5G hinges on this budget and the government must provide the necessary firepower to steer a new phase of innovation and global competency for the sector at large. These positive reinforcements will help bring alive the digital aspirations of the world’s most populous country to move towards a digitally powered economy.
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2023年预算:电信的一个新时代的黎明
“部门继续困扰与诉讼和他们争夺资源的消耗所有的利益相关者。一个典型的例子是TDS充电折扣券上的分销商在愤愤不平的电信公司辩称,TDS下节194 h @ 5%不是必要的事务是一概基础上,而不是主要代理。TDS 5%严重影响分销商的利润。在我看来,这个问题可能得到解决通过减少TDS率从5%提高到1%,“Aggarwal说。
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印度的电信业站在革命的风口浪尖,由5 g的推出,生产相关的激励(PLI)计划和电信法案草案旨在取代三个古老的电信法律。政府正在满负荷运转的多方向通过无数的动力政策计划包括暂停运营商的监管费,合理化调整后的总收益(AGR)或100% FDI通过自动路线。在将来,一个希望这种势头继续普遍服务义务的合理化基金(“USOF”)(即。减少利维等待支付闲散资金)和更清晰的新引入的某些方面适用的总收入(ApGR)(即。,定义电信活动只意味着许可活动)。
预算2023在我看来应该是在的更大的调整依据税收政策与地面电信业务的现实。
这样的一个现实是,该行业是资本密集型和需要频繁升级的网络基础设施跟上快速变化的技术。这必然导致巨大的累积损失。然而,在开一个阈值的八年,弘扬和相关规定引发的损失按照“一刀切”的方法,忽略的细微差别和不同企业的特点。或许,情况考虑延长这个阈值12到16年允许电信公司足够的时间要求这些损失。
情况有点类似的弘扬和引发的损失融合。法律规定合并公司持有75%的资产的账面价值为5年。有趣的是,这个时间是规定的,尤其,银行、制造业、公共事业、软件、电力和矿业公司。显然这些企业明显不同,因此需要考虑放松这个阈值的电信业务。
部门继续得到困扰与诉讼和他们争夺资源的消耗所有的利益相关者。一个典型的例子是TDS充电折扣券上的分销商在愤愤不平的电信公司辩称,TDS下节194 h @ 5%不是必要的事务是一概基础上,而不是主要代理。TDS 5%严重影响分销商的利润。在我看来,这个问题可能得到解决通过减少TDS率从5%降至1%。
在印度的是该国的基石Atmanirbhar巴拉特的野心和PLI方案是一个强大的引擎来支持。因此,电信PLI计划的成功不能被高估了。其他国家激励补充这个方案,为公司提供多个选项建立生产设施。然而,这将是这些行动必须被解决一些初期问题适时补充的运营商和基础设施提供商阻止他们的营运资本和造成巨大的困难。
移动基站和避难所是否固定是否合格的ITC蒙上了一层阴影。而争论仍在继续,另可避免讨论酝酿在网络设备上安装这些塔,这显然是可移动的。这里的问题是,是否提供和ITC的原则被阻塞在不动产可以同样适用于网络设备的塔?预算2023应该澄清的计数。
目前,正在由运营商支付销售税在反向电荷机制(RCM)供应由政府,尤其是在光谱采集费用,执照费(“低频”)频谱使用费用(往下)。ITC引起的这是创造巨大的失衡与对外负债。因为这是为政府收入中性,适当澄清可能发布免除这类费用和收费征收的销售税。另外,付款在RCM在政府服务ITC平衡可以允许的。
总之,推出5 g的成功取决于预算和政府必须提供必要的火力引导行业创新和全球竞争力的新阶段。这些积极增援部队将有助于活着的数字愿望世界人口最多的国家走向数字化驱动经济。
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