New Delhi, Nov. 25: Indigenous manufacturers of telecom equipment, electronic components, consumer electronics and information technology hardware today urged the government to set up a Telecom Finance Corporation.
Four associations representing these industries are of the view that the corporation should be set up to help operators buy local equipment instead of imported ones, which come with cheaper export credits and vendor financing.
In a pre-budget memorandum to be presented to the finance minister, Jaswant Singh, the associations have also sought the introduction of a composite value-added tax of 17 per cent. This will replace the existing 16 per cent Cenvat. In addition, they want a reduction in customs duty on basic raw materials, colour picture tubes, colour glass parts and capital equipment.
The Telecom Equipment Manufacturers Association (Tema) has said that Trai and National Telecom Policy 1999 have come out in favour of promoting indigenous manufacturing of telecom equipment and giving incentives to operators who use local gear.
“We urge the government that the service operators may be allowed to set off, against the service tax, the excise paid by operators on indigenously manufactured equipment,” said Narendra Kumar Goyal, president of Tema.
“There should be appropriate deduction in the revenue sharing license fee to be paid by the operators in case they use indigenously manufactured telecom equipment,” he added.
Tema has suggested that telecom service providers should be given a benefit in the form of deduction of one-third of the cost of using locally manufactured equipment from the gross adjusted revenue for the purpose of levying revenue sharing charges.