According to a report, the telephone users in the country are likely to receive a gift from the government in the form of a further reduction in call charges. The Union Finance Minister P Chidambaram has favored the system of unified levy of taxes for the telecom sector.

The telecom players in India usually pay 30 per cent of their revenue as levies such as annual licence fee, spectrum charges, and contribution to universal service obligation (USO) fund to the government. The addition of the service tax makes the total burden as 40 per cent for the telecom companies.

Finance Minister P Chidambaram said that the government has proposed a single unified levy system in the country. The finance ministry has asked Department of Telecom to set up a committee to prepare the proposal.

Chidambaram said:

The committee to the best of my knowledge has not yet submitted the report.

According to the report, the DoT has developed a thought that the rationalization of tax is essential. The committee has decided to take certain necessary steps in this direction.

For some time, the Telecom companies in India have been asking to introduce the needed rationalization in taxes and the single unified levy. The telecom players have also said that the introduction of the unified levy system would help in further reduction in telephone tariffs in the country.

At present, the government has different licence fee for different kind of access services such as basic services and cellular mobile services as well as STD and ISD operations.

The telecom industry had earlier urged the government to replace the separate tax system by introducing a single service tax to promote more investment in Indian telecom market that is said to be the fastest growing telecom market across the world.

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