India's telecom industry body has made a strong plea to the government ahead of the Union Budget. The Cellular Operators Association of India wants regulatory levies reduced and GST norms eased. COAI argues that high statutory payments continue to strain the sector's financial health.
Licence Fee Reduction Proposal
The association has proposed a significant cut in licence fees. Currently, telecom operators pay a 3 per cent levy on Adjusted Gross Revenue. COAI wants this lowered to just 0.5 to 1 per cent. The body says the existing structure places a heavy burden on licensed telecom companies.
COAI director general Lt Gen Dr SP Kochhar explained the situation. He said the current levy framework imposes significant financial pressure on operators. The association represents major players including Reliance Jio, Bharti Airtel and Vodafone Idea.
Digital Bharat Nidhi Concerns
The licence fee comprises two components. There's the 3 per cent licence fee plus a 5 per cent contribution to the Digital Bharat Nidhi. COAI calls this combination a huge financial burden for telecom companies.
The industry body has made another important request. It wants the Department of Telecommunications to pause further contributions to the Digital Bharat Nidhi. COAI suggests waiting until the existing unutilised corpus gets fully used first.
GST Relief Recommendations
On GST-related issues, COAI has flagged serious concerns. The association points to rising input tax credit accumulation in the telecom sector. It recommends special GST exemptions on several regulatory payments.
These include licence fees, spectrum usage charges, and spectrum acquired through auctions. As an alternative, COAI suggests cutting the GST rate under the Reverse Charge Mechanism. It wants the rate reduced from 18 per cent to just 5 per cent on these payments.
Financial Impact and Benefits
COAI believes these changes would help multiple stakeholders. The association says reduced levies would ease financial stress on operators. This would allow companies to invest more in network expansion and next-generation connectivity.
The body also proposed allowing use of existing ITC balances. Operators could use these to discharge GST liabilities under RCM on licence fees and SUC. COAI says this move would reduce cash outflows and improve credit utilisation.
Broader Sector Importance
COAI emphasized the telecom sector's wider role in India's economy. The association said telecommunications is no longer just a standalone vertical. It has become a horizontal value-added enabler supporting multiple industries.
In this context, COAI called for broader recalibration of spectrum pricing. It wants assignment models to reflect the sector's strategic importance. The association believes this aligns with the government's Viksit Bharat vision for a developed India.
The industry body maintains that its proposals would benefit everyone. Reduced levies would help operators financially while remaining revenue-neutral for the government. COAI says this approach would offer liquidity relief and reduce ITC pile-up simultaneously.
