'Tax proposals on spectrum allotment to lead Rs 30K cr outgo'

The budget proposals to tax all spectrum allotments will lead to an outgo of Rs 30,000 crore in 2016-17 for assignment of airwaves and licence fees, putting further financial stress on the telecom industry, GSM operators body COAI said today.
The Union Budget which intends to impose a 15 per cent tax on all spectrum allotment by the Centre (via auctions) and spectrum transactions between licencees (trading and sharing) will have a detrimental impact on the telecom industry directly and on the nation and customers indirectly, COAI said.
"The broad estimates of tax outgo on spectrum assignment and licence fees amounts to Rs 30,000 crore for FY17. This input tax will ultimately need to be collected on telecom service rendered to the end consumers to offset from a cash flow perspective," COAI said in a letter to Finance Minister Arun Jaitley.

Sharing figures, the body said as per broad estimates, in the upcoming spectrum auction, if all the airwaves are sold, the government will get atleast Rs 5.36 lakh crore, on which operators have to pay Rs 77,000 crore as service tax.
The industry body said additional taxes proposed in the Budget 2016 will force the industry to increase tariffs across the board which will impact the entire Indian population.
"The proposal to tax spectrum assigned by the government to telecom operators which is an input to the operators in unintentionally punitive and is evidently resulting in material distortion and discrimination to the industry," COAI said.