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New govt should ease tax burden on telecom sector

New govt should ease tax burden on telecom sector
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Telecom Department should adopt the recommendations given by the regulator – Rajan S Mathews

New Delhi: Industry body COAI on Tuesday said the new government post elections should set out a clear roadmap to ease the burden of levies on the telecom sector, and issues including cut in licence fee and spectrum charges should be taken up at the earliest, preferably in 6-9 months' timeframe.

COAI rued that revenue continues to remain under pressure for the industry saddled with high debt, and for most players the earnings before interest, tax, depreciation and amortization or EBITDA generated "is not enough to meet the interest expenses".

"The definition of adjusted gross revenue (AGR) should be reviewed to include revenue from licensed activities only ... Telecom Department should adopt the recommendations given by the regulator on the issue of determination of AGR," Cellular Operators Association of India (COAI) Director General Rajan S Mathews told reporters here.

COAI said that income from interest, dividend, capital gains from sale of fixed assets, gains from forex fluctuation, income from rent, insurance claims, and distributors margin should not be included in the revenue of the telecom operators for the purpose of computation of licence fee and spectrum usage charges.

Also, revenue from sale of handsets and other subscriber terminals like routers should also be not included in the AGR, it said.

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