India’s telecom industry body COAI has asked the government to reduce regulatory levies and ease Goods and Services Tax (GST) norms in the upcoming Union Budget, arguing that high statutory payments continue to strain the sector’s finances.The Cellular Operators Association of India (COAI), whose members include Reliance Jio, Bharti Airtel and Vodafone Idea, has proposed lowering the licence fee to 0.5–1 per cent from the current 3 per cent, saying the existing structure places a heavy burden on telecom operators, reported news agency PTI.At present, the licence fee comprises a 3 per cent levy on Adjusted Gross Revenue (AGR), along with a 5 per cent contribution to the Digital Bharat Nidhi. “The licence fee, which is a combination of the licence (three per cent of AGR) and Digital Bharat Nidhi Contribution (five per cent of AGR), is a huge financial burden for the licensed telcos,” COAI said in its submission.The association argued that a reduced levy of 0.5–1 per cent would be sufficient to cover administrative costs.COAI has also urged the Department of Telecommunications to pause further contributions to the Digital Bharat Nidhi until the existing unutilised corpus is fully used. The industry body said such steps would help reduce financial stress and allow operators to invest more in network expansion and next-generation connectivity, in line with the government’s ‘Viksit Bharat’ vision.On GST-related issues, COAI flagged concerns over rising input tax credit (ITC) accumulation in the sector. It recommended a special GST exemption on regulatory payments such as licence fees, spectrum usage charges (SUC), and spectrum acquired through auctions, reported news agency ANI.As an alternative, the association suggested cutting the GST rate under the Reverse Charge Mechanism (RCM) on these payments to 5 per cent from the current 18 per cent. COAI said this would be revenue-neutral for the government while offering liquidity relief to telecom operators and helping reduce ITC pile-up, as per ANI.COAI director general Lt Gen Dr SP Kochhar said the current levy framework continues to impose a significant financial burden on licensed telecom operators. The association also proposed allowing the use of existing ITC balances to discharge GST liabilities under RCM on licence fees and SUC, a move it said would reduce cash outflows and improve credit utilisation.Emphasising the sector’s wider role, COAI said telecommunications is no longer a standalone vertical but a “horizontal value-added enabler” supporting multiple industries. In this context, it has called for a broader recalibration of spectrum pricing and assignment models to reflect the sector’s strategic importance in India’s digital economy.
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