Telecom companies, burdened with debt and engaged in a battle for customers, are set to ask the government to exempt them from goods and services tax on payments made towards spectrum and licence fees.
The Cellular Operators Association of India plans to write to the Department of Telecommunications to explain how their burden will ease if payment of regulatory levies by telcos is exempted from GST, people familiar with the matter said. Alternatively, they are seeking a refund of input tax credit of about Rs 30,000 crore because they’re unable to set it off against GST by charging their users due to intense competition and low tariffs.
“At an industry level, almost Rs 30,000 crore is stuck for all operators due to GST blockage,” said a person aware of the matter. COAI did not respond to ET’s queries on the issue. The input tax credits have accumulated since GST was introduced in July 2017 and are impacting the balance sheets of telecom companies encumbered with debt of Rs 7 lakh crore and seeking a relief package from the government.