Deloitte seeks tax sops for telcos for participating in Digitial India, cut in applicable MAT rates in Budget 2016

KOLKATA: In the run-up to the Union budget for 2016-17, Big Four consulting firm Deloitte Haskins Sells wants finance minister Arun Jaitley to give strategic importance to the telecoms sector, and has called for tax sops for telcos participating in Digitial India, a reduction in applicable MAT rates and clarity on tax treatment of amortization on spectrum acquired through auctions.

"Though the subscriber base has crossed the 1 billion-mark, the power of telecoms to boost GDP, improve inclusion, including financial inclusion for the under-privileged and the rural sector, to reducing the digital divide, wastage and leakages has not been leveraged," said Hemant Joshi, Partner, Deloitte Haskins & Sells LLP in a media statement Thursday.

The government, he said, should give strategic importance to the telecom sector in the budget as it is "the backbone of the digital world".

Joshi has also urged Jaitley to ring in incentives for small mobile payments to make the Indian economy cashless and pave the way for tax holidays and weighted capex deductions for private sector participation in the Modi government’s Digital India Initiative.

The Deloitte partner said the FM needs to clear the air on amortization on spectrum acquired through auction under Income Tax Act to "avoid litigations".

Joshi has also urged the FM to consider sops in the form of weighted deductions, reduced licence fee payouts for telecom operators /infrastructure providers deploying green technology for electricity generation.

Deloitte’s Joshi has also sought clarity on TDS deduction on sale of talk-time to dealers, which, he said " would go a long way in improving ease of doing business".