Customs Duty Exemption to Vessels Engaged in Laying Submarine Cables in India a Positive Step: Telecom Industry

Customs duty exemption for cable-laying vessels in India extended, signaling a telecom win, says COAI's SP Kochhar.By ETTelecom
February 1, 2024

New Delhi: The government has extended the customs duty exemption given to vessels engaged in laying submarine cables to September 30, giving relief to the telecom sector. The exemption was coming to an end on March 31.

Industry body Cellular Operators Association of India (COAI) has lauded the move as telecom companies depend heavily on submarine cables for the high-speed transfer of data around the globe and this step will help in following the compliances.

“In a significant gain for the telecom sector just before the interim budget, the current customs duty exemption granted to vessels engaged in laying submarine cables in India – which lapses on March 31, 2024 – was extended up to September 30, 2024,” SP Kochhar, Director General of the COAI said.

While the interim budget presented by Finance Minister Nirmala Sitharaman did not make any changes in taxes and levies on the telecom sector, the industry is hopeful of a positive outcome in the full budget to be presented after the elections in July.

“We are hopeful that in the post-election full budget, the industry's suggestions will be considered by the government,” Kochhar said.

The industry has sought reduction in regulatory levies like license fee, deferring USOF contribution till the existing funds are exhausted, exemption of basic customs duty (BCD) on telecom equipment, waiving of GST on regulatory payments and refund of ITC, among others.

Currently, the telcos pay 8% of the adjusted gross revenue (AGR) as license fee to the government.

“The interim budget presented by the Finance Minister today reemphasized the government's economic policies and the commitment to sustained growth, improving productivity and creating opportunities with a focus on skilling and reskilling,” Kochhar said.

He further said the announcement of a corpus of Rs 1 lakh crore for the technology sector is a positive measure as access to capital is a critical factor to support innovation and growth, “The long-term, interest-free or low interest rate loans and focus on deep tech will further encourage the private sector to scale up research and innovation,” he added.

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