TAIPA: Telecom Infrastructure industry invests Rs 10,000 crore annually in towers

Further tower and pre-fabricated shelters also qualify as ‘inputs' as well as ‘capital goods ‘as applicable, used for providing output service to telecom operators.

    Telecom Infrastructure industry makes a direct contribution of more than Rs. 5,000 crores annually in corporate income tax and service tax and invests more than Rs. 10,000 crores annually in towers as per Tower and Infrastructure Providers Association (TAIPA).

    TAIPA: Telecom Infrastructure industry invests Rs 10,000 crore

     

    TAIPA that represents Bharti Infratel and Reliance Infratel said telecom Infrastructure industry makes a direct contribution of more than Rs. 5,000 crores annually in corporate income tax and service tax and invests more than Rs. 10,000 crores annually in equipment like towers, shelters, batteries, air-conditioners, DG sets and power management systems etc. supporting the 'Make in India' and Digital India vision of the Hon'ble Prime Minister.

    TAIPA also appreciated the judgment of Hon'ble High Court of Delhi for allowing CENVAT credit on Telecom towers and parts thereof and pre-fabricated shelters, etc.

    According to Delhi based group, the revenue authorities disputed the availability of the input tax credit mechanism on the ground that the telecom towers and shelters were 'immovable' in nature and consequently did not qualify for input tax credit, as defined under the CENVAT Credit Rules, 2004 (CCR).

    However, the telecom industry contested that the telecom towers and shelters are 'movable' in nature. The Hon'ble High Court of Delhi passed a favorable order vide order dated 31st Oct 2018 in favor of TowerCo and strongly observed that the equipment is fastened to the civil foundation for a 'wobble-free operation' and to provide greater stability. The tower/shelter may be unbolted and reassembled without any damage to any other location.

    Further tower and pre-fabricated shelters also qualify as 'inputs' as well as 'capital goods 'as applicable, used for providing output service to telecom operators.

    Tilak Raj Dua, Director General, TAIPA " We appreciate and honor the judgment of Delhi high court for allowing CENVAT credit on Telecom towers and related shelters, accessories etc. which was available before GST regime. The availability of Input tax credit (CENVAT credit) mechanism will reduce overall billing by IP-1s to TSPs."

     

    For streamlining the issue, TAIPA had 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.

    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 5 lakh towers mounted with over 20 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.

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