Modi Govt removes double taxation on virtual network operators

The government has removed double taxation on virtual network operators, entities that can resell telecom services, to make doing business easy, Telecom Minister Manoj Sinha said Thursday.  Virtual network operators can claim set-off on input cost for which charges have already been paid by parent operator.

"For the sake of ease of doing business, we have removed double taxation on virtual network operators, " Sinha told reporters at the India Mobile Congress.

Under modified rules the Department of Telecom has decided to deduct payments for resources taken by Virtual Network Operators (VNOs) from telecom service providers, thereby reducing levies payable by VNOs. "This avoids double taxation at various stages," Sinha said.

The virtual network operator (VNO) will be an entity providing telecom services like mobile landline and Internet, but only as a retailer for full-fledged telecom operators such as BSNL, MTNL, Airtel and the like.

The entry of VNOs is expected to push down the cost of offering telecom services for the companies and even give them room to slash tariff.

The Department of Telecom (DoT) has received over 70 applications seeking permission to provide telecom services.
Telecom Secretary Aruna Sundararajan said VNOs will need to pay licence fee but they can claim set-off on input cost incurred by them.

To push ease of doing business, the government announced new National Frequency Allocation Plan. Under the plan, the government exempted over 30 licence bands for short range devices, Ultra-Wideband Devices and additional spectrum for machine-to- machine services. 

Under the new NFAP, the government announced releasing of 605 MHz license exempt spectrum in 5GHz band for Wireless Access Services.

India signalled its spectrum plans for 5G services aspiring to adopt the next generation technology as a leading market.

Sinha at the event reiterated India's readiness to start 5G services at par with advanced nations of the world and achieve broadband access for all as envisaged under National Digital Communications Policy.

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The minister announced that the industry will rollout one million WiFi hotspots in the country by December 2019, which is another step towards the digital empowerment of the nation.