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Taxes on Mobile Telephone Towers in Rajasthan

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The Rajasthan Government has today finalized the revenue sharing model for the telecom towers & has asked all local bodies under it to levy taxes on mobile telephone towers. This has come at the time when almost every company is in expansion mode. This would for sure increase their capex now.

According to Dr. R. Venkateshwaran, Department Secretary, State Local Self Government, a one time deposit of Rs 25,000 per towers in a municipal corporation limits and Rs 15000 in other municipalities has been decided. Also an annual rent of Rs 5000 per tower would be paid.

He further said, “Apart from ringing in additional revenues for the cash strapped local bodies, the taxation would lead to regulation of the towers, We have promulgated the rules. Now local bodies will decided as to how to levy the taxes.” He further added,”While levying tax on all the upcoming towers, they are free to impose it on ‘already installed’ towers as well.”

Rajasthan has seven GSM operators and three CDMA operators with more than 20,000 mobile towers. In this case, the annual rentals on the existing number of towers can earn the local bodies a revenue in excess of Rs 10 crore.

No company as of yet has made any comment on the decision. If implemented successfully, it would act as an example for other States to follow. The already sweating telecom industry would sweat even more then.

 

In a major setback to telecom companies operating in Rajasthan, the state government has directed local bodies to levy taxes on mobile telephone towers . It has come at a time when telecom companies, specially 3 G licensees – Airtel, Reliance, Tata Docomo and BSNL – are investing heavily on expanding its coverage and services. 

The state local self government department secretary Dr. R. Venkateshwaran told ET that the mobile companies will have to shell out a one time deposit of Rs 25000 per tower in municipal corporation limits and Rs 15000 in other municipalities. “Besides they will also have to pay an annual rental of Rs 5000 per mobile tower.

Apart from ringing in additional revenues for the cash strapped local bodies, the taxation would lead to regulation of the towers,” he said. The department, however, has left it on local bodies to decide the course of implementation. “We have promulgated the rules. Now local bodies will decided as to how to levy the taxes.

While levying tax on all the upcoming towers, they are free to impose it on ‘already installed’ towers as well,” he said. Rajasthan has seven GSM operators and three CDMA operators with more than 20,000 mobile towers. In this case, the annual rentals on the existing number of towers can earn the local bodies a revenue in excess of Rs 10 crore.

The one time deposits will only spruce up the collection. However, the burden of this tax will be distributed among the telecom operators as they are into mobile tower sharing agreements. “The tower business has been outsourced to tower erecting companies.

I would not like to comment on the government’s decision at this point of time,” said Rajasthan Airtel Circle head Sudipto Chowdhury. The circle heads of other companies also declined to comment on this issue.

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