INDIA'S 560-million cellphone users will have to pay an extra 2% of their bill amount as R&D cess to boost the telecom equipment industry if the government accepts a communications ministry proposal. Mobile phone users currently pay 12% service tax and 2% education cess on their bills.
The telecom department first floated this proposal in 2006, but did not press for implementation. It now wants to revive this option of imposing an R&D cess, an internal department note said. This is part of a 14-point strategy that the Department of Telecom (DoT) is advocating to transform India to a telecom manufacturing hub.
"It is estimated that the requirement of telecom equipment would be over Rs 5,00,000 crore till 2015," the department's internal note said, adding, "However, despite the growth of market many folds, share of indigenous equipment has fallen down from 74% on 2003-04 to 30% in 2008-09."
Some of the 14-point turnaround strategies have been implemented over the last few months. For instance, last week, the government issued a directive mandating foreign gearmakers to manufacture core telecom equipment locally or mandatorily transfer technology to Indian manufacturers within a three-year period.
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With thanks : source : Times of India
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