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Top Telecom Association; COAI Proposes 7 Recommendations for Union Budget 2024

COAI Proposes 7 Recommendations for Union Budget 2024: The top body in the digital communication industry, the Cellular Operators Association of India (COAI), has sent the Ministry of Finance its proposals for the Union Budget 2024–25. The main objective is to improve the telecom sector’s financial stability.

The following are the main suggestions:

1. Universal Service Obligation Fund (USOF) tax

COAI is in favor of the USOF tax being discontinued. If it isn’t feasible, it proposes pausing the five percent USOF Adjusted Gross Revenue (AGR) payment until the fund runs out. COAI also suggests lowering the license price from three percent to one percent, which would just pay for administrative expenses.

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2. Direct Tax

Under Section 72 of the Income Tax Act, 1961, COAI requests a unique provision that would enable telecom operators to carry forward business losses for sixteen assessment years. This would alleviate the industry’s problems and deal with recent rulings from the Supreme Court.

3. Service Tax

In an effort to lessen the impact of service tax, COAI suggests exempting revenue from the use of resources that are allocated to the telecommunications industry. A service tax exemption is required as a means of providing relief due to the additional burden imposed by the recent Supreme Court decision regarding the Adjusted Gross Revenue (AGR) calculation.

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4. Customs Duty

COAI requests a progressive reduction in customs duties for undersea cable deployments after March 31, 2024, the current deadline. This will guarantee the ongoing installation of underwater cables and advance the growth of regional manufacturing capacities.

5. GST

COAI requests that license payments, spectrum usage fees, and spectrum acquisition fees be exempt from GST. By doing this, financial strain would be lessened and funding for sector development would be more readily available.

6. Activities in the Specific Economic Zone (SEZ)

In order to minimize disruptions and guarantee a seamless transition, COAI suggests extending the present termination date for vessels engaged in the installation of underwater cables past March 31, 2024.

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7. GST Exemption Requested by COAI

The organization is asking for a GST exemption on license fees, spectrum usage charges, and spectrum acquisition prices. This exemption would ease financial strains and support the expansion of the industry.

The telecom industry hopes that by putting these ideas into practice, financial strain will be lessened and operating capital will become available, which would ultimately aid in the sector’s growth.

The Founder and CEO of TelioLabs, Amit Singh states about the Union Budget 2024 expectations in the telecom sector,

“We need to give special attention to the growth of start-ups in the telecom sector. And if we expect innovation in the Telecom sector, this can be achieved through targeted grants for start-ups. Such financial support empowers emerging ventures to do ground-breaking research, giving birth to cutting-edge technologies. These initiatives not only drive technological advancements but also strengthen the country’s telecommunications infrastructure. By encouraging startups to explore novel solutions, governments can catalyze progress, enhance connectivity, and ensure the nation stays at the forefront of telecommunications innovation. Ultimately, these grants serve as catalysts, encouraging start- ups towards transformative contributions in telecommunications.”