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With Indian telecom companies struggling to keep themselves afloat, they are now seeking a waiver on goods and services tax (GST) on spectrum payments and other levies. However, Reliance Jio Infocomm, owned by India’s richest man Mukesh Ambani, has a dissenting view on the matter.
The Cellular Operators Association of India (COAI) has asked the government to adjust tax credits of 350 billion rupees (US$4.88 billion) in pending payments such as license fees and spectrum charges, Press Trust of India reports.
It said that since telecom firms’ have had to spend more capital while revenues have fallen substantially, creating liabilities across the sector.
It cited a report by the Telcom Regulatory Authority of India, stating that telecom industry revenue fell 32% between April-June 2016 and April-June 2018. COAI claims that this had led to the blocking of approximately 350 billion rupees of telecom operators’ capital in the form of excess GST credits.
However, since there is no industry consensus on the issue – with Reliance Jio expressing dissent, the government may be reluctant to agree to the request.
In a related development, Vodafone Idea chairman Kumar Mangalam Birla met officials in the PM’s Office to try to defer payment of spectrum charges. Vodafone Idea has to pay 95 billion rupees ($1.33 billion) in spectrum charges this year, the Economic Times reports.