NEW DELHI: Airtel’s founder chairperson Sunil Bharti Mittal took to hyperbole and incorrect information when he claimed at an industry event that telecom is being taxed like tobacco in India; he was once explaining his corporate’s poor financial efficiency for the second one quarter ended September 30.
Airtel's internet profit fell for the tenth directly quarter, down 65.4 according to cent (year-on-year), as losses on India trade widened because of pricing force from aggressive competition.
What Mittal had said: Speaking at the inaugural session of India Mobile Congress 2018, Mittal, rued that the telecom sector stays highly taxed similar to the tobacco industry, when it's contributing to India's virtual aspirations.
"In India, for every Rs 100 that mobile operators earn, nearly Rs 37 goes towards one form of levy or the other. I cannot see how this contradiction can exist...where on one hand we have PM's vision of digitally enabled India ...which requires tremendous amount of investment, on the other hand we keep the spectrum prices and our licence fee very high...and of course the GST is at 18 per cent which almost at the highest tax bracket," Mittal said.
According to Mittal’s own calculation, telecom firms pay less than 20 according to cent as tax on their profits. But evaluate that to cigarettes, the largest selling tobacco product, which can be taxed just about 55 according to cent on each stick.
A distinct bracket: Contrary to the Airtel best honcho’s lament that taxes on telecom are a number of the absolute best GST slab, they're a far off 2d to the absolute best GST slab of 28 according to cent levied on cigarettes — telecom draws a GST charge of 18 according to cent, with an added good thing about enter tax credit score on capex (capital expenditure).
Competition: It’s now not such a lot the taxes that led to a 65 according to cent drop in Airtel’s profits for the second one quarter however a bruising tariff war with new entrant Reliance Jio and newly-merged Vodafone-Idea, which has pipped Airtel as India’s biggest telecom operator. Airtel’s ARPU has declined just about 29 according to cent year-on-year for the second one quarter.
Airtel's internet profit fell for the tenth directly quarter, down 65.4 according to cent (year-on-year), as losses on India trade widened because of pricing force from aggressive competition.
What Mittal had said: Speaking at the inaugural session of India Mobile Congress 2018, Mittal, rued that the telecom sector stays highly taxed similar to the tobacco industry, when it's contributing to India's virtual aspirations.
"In India, for every Rs 100 that mobile operators earn, nearly Rs 37 goes towards one form of levy or the other. I cannot see how this contradiction can exist...where on one hand we have PM's vision of digitally enabled India ...which requires tremendous amount of investment, on the other hand we keep the spectrum prices and our licence fee very high...and of course the GST is at 18 per cent which almost at the highest tax bracket," Mittal said.
According to Mittal’s own calculation, telecom firms pay less than 20 according to cent as tax on their profits. But evaluate that to cigarettes, the largest selling tobacco product, which can be taxed just about 55 according to cent on each stick.
A distinct bracket: Contrary to the Airtel best honcho’s lament that taxes on telecom are a number of the absolute best GST slab, they're a far off 2d to the absolute best GST slab of 28 according to cent levied on cigarettes — telecom draws a GST charge of 18 according to cent, with an added good thing about enter tax credit score on capex (capital expenditure).
Competition: It’s now not such a lot the taxes that led to a 65 according to cent drop in Airtel’s profits for the second one quarter however a bruising tariff war with new entrant Reliance Jio and newly-merged Vodafone-Idea, which has pipped Airtel as India’s biggest telecom operator. Airtel’s ARPU has declined just about 29 according to cent year-on-year for the second one quarter.
Why telecom is certainly not tobacco
![Why telecom is certainly not tobacco]()
Reviewed by Kailash
on
October 27, 2018
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