Centre mulls cess on telcos for ‘Clean India’ campaign

The Centre is planning to impose an additional cess on telecom companies which will be used for the Swachch Bharat campaign.

This decision was taken at the recently held Cabinet meeting on January 5. The Department of Telecom has been told to work out the modalities and submit a proposal by January 15.

A senior DoT official confirmed the development. “The Cabinet has asked DoT to examine the imposition of a cess on spectrum usage charge for

swachch bharat kosh . We are looking at the implications of the same,” the official said.

An additional cess will, however, burden a debt-ridden telecom industry. Hemant Joshi, Partner, Deloitte Haskins & Sells, said: “The telecom sector is already under stress, and with the auctions coming up, the balance-sheet of telcos will be further leveraged.

“Further, servicing the debt would put a further strain on cash flow and profitability.

“In such circumstances, the Government should consider providing relief to the telecom sector instead of putting more burden.”

Industry unhappy

The proposal is against the industry demand for reducing levies. “Telecom operators already pay 30 per cent of their revenues to the Government as levies, spectrum charges and taxes.

Another cess at a time when the focus is on taking broadband to all is ill-advised,” said an industry representative.

The Cabinet’s direction to DoT comes at a time when the telecom regulator has proposed a reduction in the licence fees.

The TRAI has said that the annual licence fee should be reduced from 8 per cent to 6 per cent of the operator’s revenue.