COAI urges major tax reforms in first full budget of Modi 3.0

Ahead of the first Modi 3.0 budget, the Cellular Operators Association of India (COAI) has called upon the government to adopt a series of significant tax reforms in the upcoming Union Budget 2024-25.

These recommendations, submitted to the Ministry of Finance, aim to bolster the financial health of the telecom industry, a critical enabler of the government's mission for digital empowerment and inclusivity across India.

The COAI's recommendations focus on various strategic fiscal adjustments, primarily abolishing the Universal Service Obligation Fund (USOF) levy. Alternatively, the government may consider suspending the USO contribution of 5% of AGR until the existing USO corpus of approximately Rs 80,000 crore is exhausted.

COAI has also sought a substantial reduction in the License Fee from 3% to 1%. The industry body has pointed out that these cuts are essential to relieve the financial pressures on Telecom Service Providers (TSPs), especially critical as they deploy expansive and costly 5G networks. It said the 1% fee would be sufficient to cover the administrative costs by the DoT and the government.