Secretary panel likely to seek licence fee cut paid by Telecom Companies

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The Committee of Secretaries (CoS) is likely to recommend a reduction in the licence fee paid by telecom companies and allowing a two-year moratorium on spectrum payments, as part of measures to grant relief to the debt-laden sector, said three people familiar with the matter. One of the persons said the panel is set to suggest bringing down licence fee to 5% of adjusted gross revenue from 8%.

However, all GST-related matters, including a refund of input tax credit and reduction in the tax rate, are likely to be referred to the GST Council. A person familiar with the committee’s thinking said there was consensus within the panel as well as at the highest levels of the government that the telecom market needed three private players, apart from state-run operators.

However, the incumbent telecom operators are unlikely to be satisfied with only these measures and want the committee headed by cabinet secretary Rajiv Gauba to take a speedy call on providing relief on the adjusted gross revenue (AGR)-related dues, said another person. A senior telecom executive said the government also needed to find a mechanism to raise tariffs which, combined with any relief on AGR-related dues, will be the booster shot desperately needed by an industry singed by a three-year price war and over Rs 7 lakh crore of debt.

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