Telecom sector had high expectations from the Finance Minister, since several existing tax provisions were exerting additional burden on the industry and required urgent revamp. Proposals introduced in Finance Bill 2016 is a mixed bag for the telecom sector. While clarification introduced in taxation of spectrum fee and applicability of BCD may result in increased financial burden for the ailing telcos, the same may reduce future litigation. Withdrawal of customs duty exemption on battery, chargers & headsets and Introduction of lower excise duty regime for routers, modems and other CPE equipment is in line with the government focus on local manufacturing and digital India. Reduction in rate of withholding tax on commission to 5% is a welcome step for the telecom industry.
Technuter.com News Service