Telecom gear makers want infrastructure status, tax sops in Budget

KOLKATA: In the run-up to the budget for 2016-17, local telecom gearmakers want finance minister Arun Jaitley to confer “infrastructure status” and extend tax sops under Section 35AD for domestic manufacturers complying with the government's PMA or `preferential market access' policy.

The Telecom Equipment Manufacturers Association of India (TEMA), which represents local telecom product makers, also wants the government to levy a 5% cess on telcos to build a corpus for funding local telecom R&D and IPR creation.

Key TEMA members include Bharti Teletech, C-DoT, Bharat Electronics, Sterlite Technologies, HFCL, Lava Mobiles, ITI, Birla Ericsson Optical and United Telecom among others.

“Infrastructure status to domestic telecom equipment manufacturing companies complying with PMA provisions will help the industry to benefit from the incentives,” said TEMA chairman Emeritus N K Goyal in a statement Tuesday.

The PMA policy progressively calls for 100% local sourcing of security-sensitive telecom gear for government contracts. Goyal said the proposed levy of a “5% cess on telecom service providers” would help create a corpus to support telecom R&D and IPR creation for local product development.

Tema has also sought extension of tax sops under Section 35AD to local telecom gear makers complying with PMA norms to boost local manufacturing of electronics and telecom gear.

The industry lobby body, representing local gear makers, has also sought imposition of 25% duty on telecom/ICT products under the `Others’ category that are now being imported at zero duty. These would primarily include mobile network and broadband systems that are outside the purview of Information Technology Agreement (ITA) that India inked back in 1997.