Telecom Industry Body Writes To DoT Seeking Relaxtion On AGR Dues

The telecom industry has sought some immediate attention from the government including hike in floor pricing of tariff, reduction of GST and licence fee.

In a letter to Anshu Prakash, Secretary, DoT and Chairman, Digital Communications Committee (DCC), telecom industry body Cellular Operators Association of India (COAI) on Wednesday wrote that there requires an ‘urgent support from the government to address the current health of the telecom sector.’

One of the first suggestions that COAI made to the government was some relaxation on the AGR dues. “We request the government to allow set-off of GST credits lying with the government. Further, after the GST set-off, the payment of balance amount of interest, penalty, and interest on penalty be allowed in a staggered manner,” Rajan S Mathews, Director General, COAI said in the letter which BusinessLine accessed.

Although a complex process, telecom companies have made provisional assessment of AGR dues on the basis of Supreme Court judgement, he said adding that as individual companies are stretching to make as much payment as is possible in a stressed financial situation, the following credit due to operators from the government, if adjusted can help companies meet AGR payment.

“It is requested that a moratorium of three years be provided, as we expect that it will take at least that much time to recover the health of the sector, followed by a payment tenure of 15 years at a simple interest of 6 per cent,” Mathews wrote in the letter.

The letter said amounts payable under the Supreme Court judgement, after mutual discussion maybe frozen to avoid recurring claim of interest, penalty and interest on penalty. “In the alternative, the government may consider granting loan equal to the AGR amount at 6 per cent rate of interest so that the AGR liability maybe discharged immediately,” he suggested.

Mathews also suggested reduction of License fee from 8 per cent to 3 per cent as Indian telecom sector remains one of the most heavily taxed sectors when compared to taxes, levies and surcharges levied on telecom service providers in South Asia and ASEAN countries, with around 29 per cent to 32 per cent of revenues payable to exchequer in the form of levies and taxes like License fees, SUC, etc.

The copy of the letter was also marked to Minister for Communications, Electronics & Information Technology and Law & Justice, Finance Minister, Principal Secretary and Advisor, Prime Minister’s Office, Cabinet Secretary and others.

Meanwhile, the DCC is also meeting today to discuss the health of the sector and AGR issues.―The Hindu Business Line