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Reduced license costs and Royalties are necessary for business and TRA.

DoT Refuses to Reduce Levies, Citing Potential Revenue Loss: Report

Because of possible income losses, the Telecom Ministry has declined to lower fees and rates for telecom providers. Reduced spending has been demanded by both the industry and India’s telecommunications regulator.

HIGHLIGHTS

  • The DoT denies the telecom industry’s request for lower license costs and taxes.
  • In 2015, TRAI had suggested lowering taxes, but the DoT has not yet responded to the suggestion.
  • According to DoT, a decrease in levies can result in a loss for the exchequer.

The Department of Telecommunications (DoT) has rejected repeated requests from the sector and recommendations from the Telecom Regulatory Authority of India (TRAI) to lower the licensing costs for telecom operators. The agency has informed the industry that it has already taken several actions and done a lot to promote the sector, and that decreasing taxes will result in a loss for the exchequer, according to authorities, ET said.

Also Read: The DoT Block Lost or Stolen Mobile Service is now available to all Indian users.

An official who wished to remain anonymous stated that “during a recent meeting with industry, it was communicated to them that the government would provide supporting measures to the sector, but current levies won’t be reduced.”

DoT Turned Down TRAI’s Recommendation

Additionally, the DoT rejected the TRAI’s suggestion to lower the universal services obligation (USO) fee from 5% to 3% because it would mean losing money. Although the DoT was obligated by section 11 (1) of the TRAI Act to react to the regulator on the proposal and provide an explanation as to why it was rejected, it has not done so since TRAI proposed a decrease in levies in 2015. After the DoT provides an explanation for rejecting the suggestions, the Trai has 15 days to change its position or restate it. The DoT ultimately makes the choice.

Also Read: DoT to Use DCRI to Monitor State Performance: Report

Finance Ministry Declined the Proposal

Another insider revealed that the DoT was compelled to modify its stance on tax reduction after the finance ministry rejected its request in 2019. “The DoT proposed to reduce levies based on the TRAI’s recommendations, but the finance ministry declined the proposal due to revenue loss,” the official was quoted in the newspaper as saying.

Also Read: Report: DoT intends to release some satellite spectrum for 5G and 6G.

No Clarity on Additional Revenue from 5G

The sector recently asked for a decrease in levies, noting the fact that telecom companies had spent a significant amount of money deploying 5G networks but lacked certainty over increased revenue from next-generation services. The leading telecom firms consequently requested the DoT to reduce the licence cost from 3% to 1% and postpone the 5% USO charge till the Rs 64,774 crore fund is exhausted through the Cellular Operators Association of India (COAI).

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Written by Shallu Srivastav

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