Other sops asked for by the telecom industry from the FY25 Union Budget include exempting the levy of service taxes “on assignment of right to use natural resources” by operators, reducing customs duty on import of telecom equipment to zero from 20%, extending exemptions granted to vessels laying submarine cables, and exemption of Goods and Services Tax (GST) on license fees, spectrum usage charges and spectrum acquisition fee.
“Payment of GST in cash on a reverse charge basis and subsequent Input Tax Credit (ITC) utilization has resulted in substantial accumulation of ITC within telecom companies, leading to a significant blockage of working capital, thereby imposing a substantial financial burden on these companies. Telcos are urging for an exemption from GST under RCM on payments related to these charges, which would alleviate the financial strain by preventing further ITC accumulation and releasing blocked working capital,” a statement by the body further said.
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