DoT backs refund of input tax credits for telecom sector

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The telecom department has asked the finance ministry to consider refunding input tax credits (ITC) that telcos have accumulated under the goods and services tax regime, two officials aware of the matter said. Though GST rules permit companies to claim refunds for taxes paid on inputs, telecom infrastructure remains specifically excluded.

The telecom ministry sent the recommendation to the department of economic affairs last week after holding internal consultations, the people cited above said on condition of anonymity. “It has been sent as a standalone recommendation,” one of the two officials said. “GST credits are there, but telcos can’t utilize them. Refunding them will require an amendment to the GST Act because, at present, there is no such provision in the law. Therefore, it has gone to the finance ministry,” the official added.

Telecom service providers have repeatedly requested the government to refund accumulated tax credits on telecom equipment or adjust the amount against their statutory dues.

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