DOT asks the finance ministry to consider refunding input tax credits of telecom companies.
The Department of Telecommunications (DoT) has asked the finance ministry to consider refunding the input tax credits (ITC) of telecom companies accumulated under the Goods and Services Tax (GST) regime, Mint reported Tuesday citing two officials aware of the matter.
Following internal consultations last week, the communications ministry sent the recommendation to the Department of Economic Affairs, the report said.
“It has been sent as a standalone recommendation,” one of the two officials informed the publication
“GST credits are there, but telcos can’t utilize them. Refunding them will require an amendment to the GST Act because, at present, there is no such provision in the law. Therefore, it has gone to the finance ministry,” he was quoted as saying.
Telcos have reiterated in the past that the government should refund the tax credits on telecom gear or adjust the amount against their statutory dues.
In this regard, refunding would help ease the financial burden of telcos, especially Vodafone Idea Limited.
The second official told the daily newspaper that the recommendation may be taken up for budget discussions within departments. He, however, said would be challenged before the proposal comes into effect as GST refunds are an issue in other sectors as well, while matters related to GST are taken up by the GST Council which takes into account views of all states.
Source- ET CFO.com