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Finance ministryproposes that multiple duties in the sector should be merged into a maximum of three levies

February 15, 2006
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The finance ministry has proposed that multiple duties in the sector should be merged into a maximum of three levies over the next few years, before moving on to a single-tax regime in five to 10 years' time. At present, telecom companies are charged as many as eight different levies, adding up to roughly 21 per cent of their adjusted gross revenue. This is amongst the highest in the world.

Consequently, customers pay at least 30 per cent of their actual phone bills as taxes. The levies include access deficit charge (ADC), revenue share licence fee, spectrum charge, sales tax on services, service tax, education cess and USO Fund, apart from import duty of 16 per cent on infrastructure and 5 per cent on handsets. A reduction in the absolute amount of these duties and levies will allow operators to plough back profits into networks and services.

 
 
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