TRAI in contradiction with GST Rates |ForumIAS

Context

The Telecom Regulatory Authority of India has pitched for a reduction in the GST rate for telecom services.

Details

TRAI has asked the Department of Telecom (DoT) to approach the Finance Ministry with two issues:
Reduction in GST rate to 5%cent from the current 18%
Treating telecom as core infrastructure sector and economy enabler in India

Universal Service Obligation Fund (USO Fund) levies:

TRAI has repeated its suggestion to reduce the USO fund levies to 3% of the adjusted gross revenue from the current 5%.
Post reduction, the applicable uniform rate of licence fee would become 6% from the present 8% of the adjusted gross revenue.

Spectrum Charges:

In a meeting between the regulator and telecom operators on June 15, the operators had raised concerns over differential spectrum usage charges (SUC) as there was no uniformity in the SUC for different telecom operators.
TRAI has also asked the DoT to relax payment period for auctioned spectrum.
At present, operators pay 25% or 33% as upfront charges of total spectrum price and the remaining is paid over a ten-year period after a moratorium of 2 years.
TRAI has suggested 10% of the bid amount as initial payment with the remaining payment spread over 18 years for spectrum payments in the 700/800/900/2100/2300/2500 MHz bands

Significance

The telecom industry is currently sitting on a debt of Rs 4.6 lakh crore.
It would be a sigh of relief for the telecom industry if the Department of Telecom accepts the recommendations of TRAI.
The recommendations if accepted are expected to ease the financial burden of telecommunication companies and keep services affordable.