Taxes on telecom similar to non-essential items like liquor, cigarette

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The telecom sector is being taxed like non essential items such as liquor and cigarette, instead of being treated as a critical infrastructure, according to Vodafone Idea. “We have got customs duty at 23 per cent, GST at 18 per cent. This is pretty similar to the way you treat non-essential items like for liquor or cigarette or something. “We paid lot of money for the spectrum, that is the reason for so much of debt that we are carrying. On top of that, you pay SUC (spectrum usage charge), USOF charges and other charges. It is overly taxed environment,” Vodafone Idea CEO Balesh Sharma told .

Vodafone Idea has debt of around Rs 1.2 lakh crore. Spectrum related payments account for 80 per cent of the current net debt of the company. “There is enough lever with the government. If government believes in Digital India, they will have to believe in this (telecom sector) being a critical infrastructure and play on bringing health of the sector back,” Sharma said. He also said competition in the market is expected to rationalise as the sector has reached the optimum level of competition.

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