COAI suggests removal of customs duty for telecom goods

GSM lobby group Cellular Operators Association of India (COAI) has recommended exemption from basic customs duty for telecom goods manufactured in the country in special economic zones (SEZs).

In its pre-budget recommendations to the finance ministry headed by Arun Jaitley, COAI said: "Such exemption would lower the cost of telecom network while at the same time, supporting the "Digital India" project of the Prime Minister."

It also recommended that any rise in rate of tax from current 12% (service tax) to a higher rate would raise the cost of telecom service.

"A consultation process with trade and industry bodies should be initiated for GST, and a platform for such consultation should be formed," it said.

Last year’s budget saw exemption from payment of customs duty was withdrawn on import of specified telecom products without mentioning the specific name or description of the products.

COAI has requested to clarify the specific names of these items.

The industry body has also sought clarity on taxability of interconnect usage charges (IUC).

It also said that in last year's budget, the rate of interest on delayed payment of service tax was increased to 30 percent, which is not compensatory but penal in nature and the same should be reduced to a more reasonable rate.