DoT seeks cut in GST on telecom services

The Department of Telecom (DoT) has suggested to the Ministry of Finance that GST for telecom services be lowered to 12% against the existing 18%.

The recommendation was made during the Budget meetings and the matter is before the Department of Revenue, Telecom Minister Manoj Sinha informed the Lok Sabha in a written reply.

"...the DoT...dated 01.12.2017 had recommended to the Department of Revenue during the process of the Budget exercise that a standard rate of GST at 12% for telecom service should be fixed in place of existing 18%," the minister said.

Sinha noted that the Telecom Regulatory Authority of India (Trai) had favoured reduction of licence fee and Universal Service Obligation levy, cut in Spectrum Usage Charges and relaxation in spectrum pay-out terms, in view of the debt burden on telecom companies.

"The issues are under examination," Sinha said.

To a separate question on the debt of telecom firms, Sinha said an Interministerial Group - tasked to review the financial difficulties of the sector - was of the view that while there were pockets of financial stress, the entire sector could not be described as being in financial difficulty.

This is because of debt, capital structure and cash flows and hence repayment capability varied from company to company.

The Interministerial Group report has recommended giving a one-time opportunity to telecom firms to opt for more number of instalments - 16 instead of the present 10 - for payment of spectrum, and the matter needs further approval by the Cabinet, the minister added.

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