The telecom companies in India have urged the government to reduce regulatory taxes and provide relief ahead of the Union Budget 2026. The current fiscal charges are a significant burden on operators’ finances.
The Cellular Operators Association of India (COAI), representing major carriers, has made a detailed submission to policymakers ahead of next week’s budget announcement.
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Industry Seeks Lower Licence Fees to Ease Strain on Operators
Telecom lobbyists have asked government officials to cut licence fees from the current 3 per cent of adjusted gross revenue (AGR) to between 0.5 per cent and 1 per cent, to better align with administrative costs. COAI also recommended pausing contributions to the Digital Bharat Nidhi until the current unspent corpus is fully utilised, arguing that the imposed charges add to cash flow pressures.
The industry’s demand comes amid ongoing investments in next-generation technologies such as 5G and expanding network coverage. Its members include Reliance Jio, Bharti Airtel and Vodafone Idea.
“Cutting licence costs would free up capital for network expansion without materially impacting government revenue”
-says COAI
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GST Relief & Tax Measures Part of Pre-Budget Demands
In addition to the licence fee reform, telcos have also flagged problems with the Goods and Services Tax (GST) regime. The association urged that regulatory payments, such as licence fees, spectrum usage charges and auctioned spectrum, should either be exempt from GST or taxed at a reduced rate.
It has proposed lowering the reverse charge mechanism rate from 18 per cent to 5 per cent on these payments to ease the build-up of input tax credit (ITC) that cannot be readily utilised.
COAI’s recommendations also include allowing operators to use accumulated ITC balances to discharge GST liabilities, a move the body says would improve liquidity. These tax-related suggestions form part of a broader push for policy reforms that telcos say are essential for sustainable investment and competitiveness.
