The Department of Telecom has asked the Finance Ministry to extend tax benefits given to infrastructure sector to the telecom tower companies.

While the tower sector was brought under the infrastructure category, it is yet to get full benefits of the same.

The DoT has written to the Finance Ministry that a quick decision would help attract more investments into the telecom infrastructure segment, which in turn will lead to roll out of communication networks to every corner of the country.

One of the key recommendations made by the DoT is to give tax exemptions under Section 801A without any sunset clause. The DoT has also backed a proposal to allow viability gap funding for new tower projects.

“Telecom sector should be eligible for all benefits available to other infrastructure sectors,” the DoT letter to the Department of Economic Affairs stated.

The DoT note follows demands made by the tower companies. The Tower and Infrastructure Providers of India had made a representation seeking various sops to tide over the current slowdown in the telecom sector. After the Supreme Court cancelled 122 2G licences linked to the 2G spectrum scam, the roll out of new networks had come to a stand still.

‘In order to facilitate growth of the economy, telecommunication is a critical element in context of the need for rapid expansion of telecom services, especially rural and remote areas, and to facilitate speedy provision of telecom services, DoT is of the view that there is merit in the request of these associations seeking concessions in terms of financial benefit,” the DoT note stated.

The Department had sent similar proposals to the Finance Ministry in the Budget recommendations but it was turned down then. Since telecom sector has now been included under infrastructure sector, the DoT has sent proposals again for a review.

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