Telecom operators have written to Finance Minister Arun Jaitley expressing concern over a proposal to collect licence fee and spectrum usage charges on revenues earned from trading airwaves. The operators said that this would amount to double taxation because individual operators are already paying revenue share on the overall operations, including income from spectrum trading.

In a joint letter to the Finance Minister, the Cellular Operators Association of India (COAI) and the Association of Unified Telecom Service Providers of India (AUSPI) said, “This provision is a deterrent to trading, making spectrum trading transactions unviable due to the imposition of a levy of 13 per cent on the transaction.”

“At present, when spectrum is purchased in an auction, the Government receives the market determined price of spectrum. Once the spectrum is put to use, based on the usage of the spectrum and the revenue generated from it, the Government receives licence fee and spectrum charges,” the operators said. COAI and AUSPI represent all telecom companies, including Airtel, Idea Cellular, Vodafone and Reliance Communications.

According to the industry representatives, the amount received from spectrum trading is once again being proposed to be subject to licence fee and SUC. The operators said that in an earlier case even the Additional Solicitor General of India has accepted that the same revenue cannot be subjected to licence fee twice.

The amount received from spectrum trading should not be taken into account, while calculating the annual licence fee and spectrum usage charges, the industry letter said.

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