Exempt Telecom Goods Made in SEZs: COAI

Published: 31st January 2015 06:00 AM  |   Last Updated: 31st January 2015 05:13 AM   |  A+A-

KOCHI:In its pre-budget recommendations, Cellular Operators Association of India (COAI) has made suggestions on direct and indirect taxes, goods and services tax, payment of customs duty, Cenvat credit, taxability of interconnect usage charges and tax withholding.

COAI said telecom goods manufactured in the special economic zones should be exempted from basic customs duty. “Manufacturers producing goods in SEZs meet the objective of ‘Make in India’.”

Besides, the industry lobby said any increase in rate of tax from current 12 per cent (service tax) to a higher rate under GST would increase the cost of telecom service, an essential service for common man.

A consultation process with trade and industry bodies should be initiated for GST, and a platform for such consultation should be formed. In last year’s budget, exemption from payment of customs duty was withdrawn on import of specified telecom products without mentioning the specific name or description of the products.

It has requested that the specific names of these items/products should be stated, without which classification of goods have become ambiguous.

The industry body has also sought clarity on taxability of interconnect usage charges (IUC). Currently, the issue is sub-judice whereas for international private leased circuit and satellite services, the judiciary has held that these are standard services and hence fee for same cannot be taxed as royalty.

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