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.
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.