It is a tough time for the ministry of finance as they progress towards the
finalization of budget proposals for the year 2001, for the communications
industry. Communication provides the infrastructure backbone on which software
and IT enabled services will sail, as India plans to become a software
superpower in the new Internet economy.
The infrastructure status should be clearly defined to include all
communication sectors that have not been covered due to the technology or lacuna
in policy. These sectors should get infrastructure benefits in terms of tax
holidays and income tax benefits. On the duty front, all the telecom
associations are in favor of removing countervailing duty and bringing the basic
customs duty to five percent on the customer premises equipment. Paging services
are in doldrums and the government should do something to revive it so that it
does not die an unnatural death.
|
Industry Demands for
the 2001 Budget |
| Basic |
Infrastructure status to new technologies like WLL, basic customs duty of five percent on handsets and infrastructure equipment |
| Cellular |
Duty on handsets should be reduced to zero percent; infrastructure status, central sales tax and countervailing duty to be nil; and waiver of customs duty on telecom software |
| ISP |
Infrastructure status, customer premises equipment like set top boxes and modems should have a basic customs duty not exceeding five percent |
| Paging |
Removal of countervailing and customs duty, central sales tax should be uniform and should be reduced to two percent, and no service tax should apply to paging services |
| Radio Trunking |
Import duty concessions for PMRTS infrastructure equipment should increase from one to three years |
| Telecom Manufacturing |
Zero customs duty for the components used in telecom manufacturing, excise duty should be reduced from sixteen to eight percent |
| VSAT |
Closed user groups – 64 Kbps, should include the domestic data network of Ku-band, also integrators setting up VSAT networks for the VSAT service providers to get import and tax benefits to VSAT companies operational from 1 April 1994 |
The government should encourage telecom manufacturing in the country and
custom duty should be reduced to zero for all the components used in telecom
manufacturing. Excise duty should also be reduced from sixteen percent to eight
percent to make the products competitive.
Pravin Prashant
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