Restrict service
tax on spectrum allotments to transactions involving only pvt. telecosThe proposed 15 per cent service tax on all spectrum allotment by
the Centre and spectrum transactions between licensees will place telecom
industry in precarious financial position thereby putting at risk major
government initiatives of Digital India, Smart Cities and rural penetration of
data connectivity and services, apex industry body ASSOCHAM has said.
“Service tax on spectrum assigned by the government to telecom operators is
detrimental to the growth of industry while increasing cost of provision of
service and directly impacting the common man,” said The Associated Chambers of
Commerce 2011
which emphasised upon affordability and accessibility. ASSOCHAM urged the FinMin to restrict the proposed service tax on all
spectrum allotments to only transactions involving spectrum trading between
private operators, besides credit on such transactions should also be not
deferred.“The move of increasing the spectrum cost is going to impact the health of
the industry and will adversely affect the investible corpus of telecom
operators, leading to challenges in rolling out new technology, networks like 4G,” it said.“This will
materially affect and dent the ability of operators to participate and bid in
future auctions while impacting some of them from survival perspective,”
ASSOCHAM further said.India’s telecom
industry which is already burdened with heavy debt, highest taxes/levies, thin
operating margins and spectrum prices are at least 130 per
cent of global norms, additional taxes will only force the industry to increase
tariffs and impact the entire population.Highlighting that assignment of spectrum is a sovereign function and are
not considered as an economic activity globally, and are as such not liable to
tax, ASSOCHAM said, “Taxing sovereign functions is extremely regressive and the
impact of this for developing countries like India is far more punitive than
developed economies.”
and Industry of India (ASSOCHAM) in a communication to the union
minister for finance, Mr Arun Jaitley.It said that
this is against the National Telecom Policy, 
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