Spectre of fall in revenue nixes telecom levy cut

Indian telecom service providers' hopes to get relief from levies on adjusted gross revenue (AGR) might get dashed on the Union finance ministry's revenue concerns, according to two senior officials close to the discussions.

- Gulveen Aulakh

Indian telecom service providers' hopes to get relief from levies on adjusted gross revenue (AGR) might get dashed on the Union finance ministry's revenue concerns, according to two senior officials close to the discussions. "It's under consideration, but (it is) unlikely that it will be accepted," one of the officials said on the condition of anonymity. "There's the issue of exchequer revenue getting affected."

Telcos had asked the government to remove the licence fee prospectively, including the universal service obligation (USO) fee, as a share of AGR, or reduce it from 8% to 0.5-1% of AGR.

The measure was suggested after the Supreme Court in September dismissed telecom companies' review petition seeking corrections in the AGR calculations.

AGR is the revenue telecom operators earn from their core services, such as mobile and internet services, and licence and USO fees are charged on it. Telcos currently pay 3% of AGR as the licence fee, and 5% of AGR as the USO fee once a quarter. The USO fee goes towards the USO Fund that is used to ensure connectivity across unconnected regions of the country.