In preparation for the upcoming budget, telecom infrastructure providers have appealed to the finance ministry for crucial tax reforms. The Digital Infrastructure Providers Association (DIPA) emphasized the need for the release of input tax credit (ITC) and the rationalization of tax deducted at source (TDS) provisions.
DIPA highlighted the importance of government support for making ITC available on telecom towers. Despite accumulating significant ITC due to GST on equipment imports and domestic reverse charge, the exclusion of telecom infrastructure from GST refund provisions has been a longstanding concern. The denial of ITC has led to numerous litigations within the industry.
DIPA’s proposal includes increasing the tax depreciation rate on batteries for industrial or commercial use to 65%, up from the current 15%, ensuring cost recovery within three years of the economic life of batteries. Additionally, the association calls for the rationalization of TDS provisions related to the purchase of electricity or diesel.
T R Dua, Director-General of DIPA, stressed the need for supportive policies, simplified regulations, and streamlined GST norms to foster the development of the telecom infrastructure industry. The industry looks forward to government support in facilitating ease of doing business, increasing investments, and contributing to long-term growth.
Major industry players, including American Towers, Indus Towers, and Summit Digitel, are among DIPA’s members. The telecom sector has been witnessing consolidation due to rising cost pressures arising from an unfavorable tax regime. Brookfield Asset Management’s recent announcement to acquire the Indian business of American Tower Corporation for $2 billion underscores the impact of tax-related challenges on industry dynamics.
DIPA’s membership includes Ascend Telecom, CloudExtel, Pratap Technocrats, Crest Digitel, Signotox Towers, Applied Solar Technologies, iBUS Networks, and Suyog Telematics. With over 7.7 lakh telecom towers hosting nearly 27 lakh base transceiver stations (BTS) in India, the industry seeks reforms to ensure sustainable growth and competitiveness.
