Government need to understand criticality of telecom infrastructure: TAIPA

NEW DELHI: Tower And Infrastructure Providers Association (TAIPA) said that it has always supported and overwhelmed Goods and Services Tax (GST)p GST regime as it would have played significance role in extending essential telecom services to the bottom of pyramid,

"Most importantly, it was targeted to bring in synergies among various departments, taxations and ultimately bringing enable ease of doing business by creating ‘one nation-one tax’," a statement said.

"However, considering the current financial health of the telecom industry under the debt of 4.5 lakh crores and ongoing hyper competition in the industry, it is imperative that the non-availability of Input tax credit (CENVAT credit) and higher tax rate will impact the overall cost of services and billing by IP-1s to TSPs," it added.

"It is pertinent to mention that Telecom Infrastructure industry makes a direct contribution of more than Rs. 5,000 crore annually in corporate income tax and service tax and invests more than Rs. 10,000 crore annually in equipment’s like towers, shelters, batteries, air-conditioners, DG sets and power management systems etc. supporting the ‘Make in India’ vision of the Prime Minister," as per the statement.

In a nutshell, such non-inclusion will impact the penetration of telecom services to the bottom of pyramid as this will shoot either cost of services or due to the ongoing hyper competition TSPs may not pass it to customer, which will further stream the financial burden on the industry.

On the ongoing issue, Mr. Tilak Raj Dua, Director General, TAIPA said “It is a retrograde and regressive step taken by the government as it will impact the overall telecom infrastructure rollout across the nation. Further, Indian Telecom sector will witness more stressed financial burden due to these developments. For Government, it is important to realise that telecommunication services now a days are essential services and need to be extended to bottom of pyramid for developing one connected nation. Over and above, it completely trembles investors interest in the country.”

TAIPA has made several submissions to various departments and ministries like Ministry of Finance, Revenue secretary, GST Council, Centre Board of excise custom, TRAI, Depart of Telecom and Ministry of Telecom etc.

"It is worth highlighting that the sector, further requires huge investment for in-building solutions, fibre and small cell deployment etc. in order cerate a robust telecom infrastructure to keep pace with technological advancements such as 5G, virtual reality, IoT and artificial intelligence etc," according to statement.

Further, the visionary initiative of honourable Prime Minister Narendra Modi such as Digital India, Smart Cities, E-Governance services and connecting the bottom of pyramid depends over the availability of critical telecom infrastructure.

Telecommunication in India has emerged as a key driver of economic and social development in an increasingly knowledge intensive global scenario. The Indian telecommunication sector has undergone a revolutionary transition in the last two decades to become the World’s second largest telecommunication market with more than 1.1 billion subscribers connected through 4,50,000 towers mounted with over 15 lakh BTSs. As per the government report, the mobile sector’s contribution to GDP which is presently 6.5 percent and will increase to 8.2 percent by 2020.