"The definition of adjusted gross revenue (AGR) should be reviewed to include revenue from licensed activities only ... Telecom Department should adopt the recommendations given by the regulator on the issue of determination of AGR," COAI
Director General Rajan S Mathews said in New Delhi.
said that income from interest, dividend and capital gains from sale of fixed assets, gains from forex fluctuation, income from rent, insurance claims, and distributors margin should not be included in the revenue of the telecom operators for the purpose of computation of licence fee and spectrum usage charges.
Also, revenue from sale of handsets and other subscriber terminals like routers should also be not included in the AGR, it said.
"Once you address the AGR definition issue, it has cascading benefits.. that is the first thing they (the new Government) should look at. Second, the issue of double taxation...you have got payment for spectrum upfront why are you continuing to tax the industry for the spectrum usage charge and licence...TRAI already recommended that SUC should come down to 1 per cent and licence fee should come down too," he said.
He added that if these outstanding issues are dealt with in the first 6-9 months by the new government post elections, it would yield "sizable benefits" for the industry.
"It would also send a clear signal to both industry and investors that the government is serious about getting the sector back on its feet," Mathews said.
Some of the major demands of the industry include reforms in AGR finalisation, allowing deductions of lease line/bandwidth charges and the charges paid by one telecom operator to another as 'pass through charges', alignment of the bank guarantees with the licence fee and SUC payouts of telecom operators, and refund of accumulated unutilised input tax credit, among others.
Under the Unified License Agreement, the licence fee currently is 8 per cent of the AGR. Further, in case the operator obtains spectrum, they also pay spectrum related charges, including payment for allotment and use of such radio waves.