Levies, Taxes, and Duties on Telecom Services: The Existing Policy in India Obliterates the Sector

Abstract

The Telecom companies in the country have invested a huge amount of funding for providing telecom services. Rapid changes in telecom technology have made it difficult for the Telcos to recover the cost as their investments are short-lived due to changes in Technology. The telecom tariff should be mostly cost-oriented, but the Telcos have no freedom to fix the tariff. Almost all Telcos are incurring losses in their operation for the past few years and the total loss of all the Telcos put together in the country has shown a figure of around ₹ 50000 Crores every year. The Government collects today various Levies, duties and taxes for Telecom Services. The Govt which was getting a mere ₹ 200 Crores as income from Telecom services in 1999-2000 is now getting around one lakh crores as income every year from the Service. It is time for the policymakers in the country to review its policy on levies, duties and taxes on telecom services for the long-term interest of the Telecom Sector.