The Telecom Regulatory Authority of India (Trai) Chairman, Ram Sewak Sharma recently said that for promoting the growth of the telecom companies in India, GST rates should be slashed from the current 18% to 5%. Trai has requested from DoT (Department of Telecommunications) for the same to be implemented by looking at the telecom industry as an integral part of the economy of the country. If the tax rates are reduced, telecom companies will get a huge relief on their financial burden. Cash flow problems for the telecom companies have risen post the AGR dues matter which has directed the companies to pay 10% advance on the dues before the 10-year payments start.
Tax Rates Can Reduce and 2G Still a Popular Service in Rural Areas
Tax rates for the companies can reduce, but it depends on the decision of DoT. According to a report from ET Telecom, Trai works with a technology-neutral approach and it is the same with the licensing framework. Thus, when asked if 2G would be gone soon from India, the Trai chief said that it depends on the telecom companies and the demand of their customers. He mentioned that in the rural parts of India, 2G is still a popular service and the demand is still there. Commenting on the investments gained by the Jio Platforms, Trai chief said that these investments have given an opportunity to Jio for leveraging technology to make more innovations in the industry. He further mentioned that innovation has been witnessed in every telecom company in the industry and to remain relevant and competitive in the market, it is important for the companies to keep innovating. As far as the foreign tech giants who invested in Indian companies are concerned, now they will be able to understand the Indian market even better. They will be able to access more diverse data which will help them in creating digital solutions and products needed in the country. The more advancements which take place in the telecom industry, the more opportunities for creating revenue streams will rise for the telecom companies.
