India’s top telecom companies, including Jio, Airtel and Vodafone Idea, have sought Union Finance Minister Nirmala Sitharaman’s urgent intervention, requesting the central government to increase the liquidity levels of the debt-laden telecoms industry by offering soft loans against GST input credits and cutting key levies like SUC (Spectrum Usage Charges) and license fees.
Industry body COAI (Cellular Operators Association of India), in a letter to the Finance Minister, has highlighted the need for such pending relief measures. It also added that these steps are absolutely vital for the cash-strapped telecom sector to grapple with the adverse economic fallout of the COVID-19 outbreak.
The association also underlined the fact that it represents all leading TSPs (telecom service providers), e-commerce and digital content providers, network equipment makers, infra-providers, and tech partners.
“Given the adverse impact on the economy and operations of the digital communications industry due to Covid-19, we request that soft loans at a marginal cost lending rate (MCLR) be given to telecom companies using GST input credits as collateral and that the high burden of regulatory levies also be rationalized by reducing license fee and SUC (Spectrum Usage Charges) payouts immediately,” COAI Director General Rajan Mathews wrote in the letter.
The telcos have not only urged the minister to expedite steps to cut SUC to 3% of a telco’s AGR (adjusted gross revenue) but also requested to reduce the license fees to 3% of revenue.
Moreover, the telecom giants have repeated their demand that all telco payments towards SUC, spectrum debt, and license fees shouldn’t be classified as `services’, and must not attract any GST. In addition, TSPs have sought exemption from service tax on license fees and SUC payable in order to comply with the top court’s order.
The telecom industry’s request for relief from the government comes even as the apex court’s final views on the AGR case is still awaited. The affected operators have sought 20 years to clear their AGR dues, but the top court has said they need to make some upfront payments to avail the option of the deferred payment mechanism.