Budget Wishlist: Digital Infrastructure Cos Seek Reforms In Power Tariffs, Tax Structure

New Delhi, Jan 21 (PTI) Digital infrastructure providers have made a strong pitch for reforms in power tariffs and tax structure, saying the telecom segment faces "several critical challenges" that require immediate attention in the upcoming budget.

Digital Infrastructure Providers Association (DIPA) wants implementation of industrial electricity rates for telecom infrastructure across all states and union territories, following the progressive model already adopted by Maharashtra, Himachal Pradesh and Haryana.

"Despite the telecom sector being recognised as an industry for over two decades, the disparity in electricity tariffs remains unresolved, creating an additional operational burden of approximately Rs 5,000 crore annually for infrastructure providers," Manoj Kumar Singh, Director General of DIPA, said.

Power infrastructure reliability remains crucial for seamless digital connectivity.

The association is seeking implementation of a 24x7 power supply to telecom sites and expedited processing of new electricity connections, as mandated by the Electricity Rights of Consumers Rules, 2020.

It believes that integration of smart and prepaid electricity meters under the Revamped Distribution Sector Scheme (RDSS) would significantly enhance operational efficiency.

DIPA had sought nationwide implementation of composite billing schemes to streamline operations and improve efficiency in billing processes.

The industry body has also proposed several measures, that it says would support and strengthen digital infrastructure.

To start with, the classification of telecom towers under 'plant and machinery' would enable better tax benefits, it suggested.

"We strongly recommend increasing tax depreciation rates for batteries at telecom sites from 15 per cent to 65 per cent, allowing cost recovery within their three-year economic life span and the increased depreciation rate would enable infrastructure providers to recover approximately 95 per cent of costs within this period, aligning tax policy with operational realities," Singh added.

DIPA is also pushing for suitable amendments that would enable ITC claims on telecom towers for the period up to November 2025, it said, adding that the current lack of clarity creates significant financial strain on operators, impacting their ability to fully utilise ITC and ultimately leading to higher operational costs and reduced infrastructure investments.

The industry is batting for stronger protective measures and penalties to safeguard critical digital assets.

Drawing attention to this issue, DIPA said security concerns regarding telecom infrastructure theft and vandalism require immediate attention, as these incidents significantly impede 5G rollout plans and digital initiatives.

For data centres, which are fundamental to India's digital transformation, the industry proposes tax holidays or concessional tax rates of 15 per cent.

"Such incentives would attract foreign investment and create employment opportunities in this rapidly growing sector," Singh explained.

The telecom sector is also seeking resolution of long-standing AGR-related issues, particularly the waiver of interest, penalties, and interest on penalties that constitute a significant portion of the dues following the 2019 Supreme Court order.

This would provide much-needed financial relief to telecom operators and enable them to invest in infrastructure development, according to DIPA.