Telecom infrastructure or tower companies are expected to incur a further loss of Rs 625 crore due to the current Goods and Services Tax (GST) rules. The Tower and Infrastructure Providers Association (Taipei) said Friday that companies in the sector do not get input tax credit (ITC) under the current GST regime.
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The industry has raised the cost of the tower from Rs 1.25 lakh to Rs 1.5 lakh. “In the last four-five years, the industry has already suffered a loss of Rs 2,500 crore as ITC,” said Taipa. Later, due to 5G, the demand for telecom towers will increase to 50,000 towers. This would give the industry an additional Rs 625 crore.
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In November 2016, Taipei said it would provide input tax credit for telecom towers. Telecom towers were later removed in 2017 from the definition of ‘plant and machinery’. This ended the ITC benefit for telecom infrastructure companies in GST payments made in telecom towers.
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