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Rationalization Of MAT Rate Needed: COAI

From price wars to consolidation, the country’s telecom sector is witnessing high competition thanks to ever-growing demand and robust subscriber addition. While aggressive pricing of high-speed data by some players has left no option for the others but to join hands, intense competition and debt are among some of the common problems for many players in the sector. With the government due to present Interim Budget 2019 in Parliament on February 1, many analysts eye the key annual event for announcements related to the telecom sector.

Here are some of the direct tax and indirect tax recommendations by industry body COAI (Cellular Operators Association of India):

Section 115JAA

Limitation of 15 years period should be removed to provide respite to companies to utilize their accumulated MAT credit.

Section 115JB 

Rate under MAT should be reduced at a comparatively reasonable rate of 10 percent in line with the reduction in corporate tax rate under the regular provisions of the Act.

Section 197

Amendment to rule 28AA to provide that AO will not consider tax liabilities which have either been stayed by AO / appellate forums or for which adequate security is provided by the taxpayer, for the purpose of processing LDC application.

Exemption from GST on spectrum payment, license fees, usage charge

Given the huge burden of taxes and regulatory levies on telecom operators and considering the fragile state of their finances, the special benefit should be provided to telecom operators in GST by way of exemption on reverse charge for regulatory payments of LF, SUC and spectrum assigned under auction.

Vodafone India, Reliance Jio Infocomm, Idea Cellular and Bharti Airtel are members of industry body COAI.―NDTV

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