Budget 2016: Telecom sector's expectation from Arun Jaitley

Bipin SapraIndia currently boasts of being the second-largest telecommunications market in the world and has recorded consistent growth. The government has also been pushing fast-tracked reforms in the sector from time to time. While roll out of GST may still take some time, the telecom industry is expecting solutions to some of its key tax concerns in the upcoming Budget.

An important concern of this sector is the current Cenvat credit scheme where several input goods/ services are being disputed as eligible inputs on which credit can be availed. Disputes over availability of credits on passive infrastructure, an essential link in the telecom service delivery, are a case in point. Appropriate steps are required to rationalize and broad-base input credit scheme to make indigenous services competitive against imports.

Similarly, restriction on input credits of recently introduced Swachh Bharat Cess must also be done away with as it leads to inflated costs of output services.

Another important issue is accumulation of Education Cess credits. While EC and SHEC have been subsumed in the increased rate of service tax, utilization of its input credit has been restricted to specific cases. Enabling provisions must be introduced to allow utilization of entire accumulated balance of EC/SHEC.