COAI, as the industry body for Telecom Sector operators, has been advocating for measures that would reduce the sector’s financial burden, thereby enabling further expansion and rollout of next-generation connectivity to achieve the goal of a Viksit Bharat.
For the budget 2026-27, the following issues have been submitted to the Government for their kind consideration
- Reduction in Regulatory Levies:
- The License Fee, which is a combination of the License (3% of AGR) and Digital Bharat Nidhi Contribution (5% of AGR), is a huge financial burden for the Licensed Telcos. COAI has requested that the License Fee be reduced from 3% to 0.5% – 1% just to cover the administrative costs.
- The Digital Bharat Nidhi contribution should be paused for the time till the unused corpus has been completely utilized by the Department of Telecommunications.
- GST Policy Issues:
- ITC Issues: With a vast sum of money being accumulated in the ecosystem, COAI has recommended the following to help in reducing the Financial Burden and help in providing relief to the sector
a. Special benefit may be provided to telecom operators in GST by way of exemption of GST on regulatory payments of LF, SUC and spectrum assigned under auction.
b. As an alternative to the above, COAI has suggested that the rate of GST under Reverse Charge on Spectrum payment, license fees, Spectrum usage charges, etc. can be reduced from the existing 18% rate to the lower rate of 5% slab, since it is revenue neutral to the Government and shall help in reducing ITC Accumulation.
c. COAI has also suggested that usage of existing ITC balance be allowed for discharging GST under RCM (Reverse Charge Mechanism) on LF/SUC, which will not only protect the cash outflow for telcos but also help in utilizing accumulated ITC.
COAI believes that the fact that since Telecom is no longer just a vertical, but a ‘horizontal value-added enabler’ for all other verticals, a recalibration of spectrum pricing and assignment models too is necessary.
