BTRC asks for NBR’s decision on VAT exemption for 4G licence

Staff Correspondent | Published: 22:17, Jan 03,2018 | Updated: 23:13, Jan 03,2018

 
 

A file photo shows a man browsing internet on his mobile phone in Dhaka. Bangladesh Telecommunication Regulatory Commission has extended by two months the deadline for revoking registration of mobile SIM cards users are holding beyond the allowable limit. — New Age photo

Bangladesh Telecommunication Regulatory Commission has requested the National Board of Revenue to inform its position on VAT exemption on 4G licence, spectrum fees and charges to be collected from the mobile operators.
The BTRC on December 24 wrote a letter to NBR chairman seeking clarification on these details.
Generally, value-added tax at the rate of 15 per cent is applicable on such fees and charges.
But, in 2013, the revenue board slashed the rate initially to 7.5 per cent and finally to 5 per cent on 3G licence fees from standard 15 per cent, following pressure from the mobile operators as condition for participating in the auction for 3G licences.
The telecom regulator said the planned auction for 4G/LTE (long term evolution) licensing and spectrum allocation might take place in February.
A specific decision of the revenue board was also needed on whether the operators would deposit the VAT and taxes related to auction to BTRC or the NBR, it said.
In addition, there was a necessity to issue a statutory regulatory order related to exemption on VAT and taxes, it added.
Officials said the revenue board lowered the VAT on 3G licence during a certain situation and the decision was applicable only on fees and charges for 3G licence.
Now, 15 per cent VAT would be applicable on 4G licence and spectrum fees and charges, unless the revenue board lowers the rate, they said.
The NBR was expecting substantial revenue from the auction, they added.
‘We have already received the communication from the BTRC and the NBR high-ups would take decision after examining the issues,’ said a high official of the revenue board.
Senior officials of the VAT wing have already started scrutinising the matter, he said.
Officials of the BTRC said the telecom regulatory commission had already issued guidelines for 4G/LTE licensing and auction for 2100 MHz, 1800 MHz and 900 MHz spectrum bands.
Mobile operators would have to pay VAT and taxes on fees and charges applicable for the licences and spectrum.
As per the guidelines on 4G service licence issuance, application fee for 4G licence has been set at Tk 5 lakh and the licence acquisition fee at Tk 10 crore.
Also, applicants would need to deposit Tk 150 crore as bid earnest money to participate in the auction of each of the three bands.
The base prices of per megahertz spectrum in 2100 MHz, 1800 MHz and 900 MHz were set at $27 million, $30 million and $30 million respectively.

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