NEW DELHI, May 7: The telecom sector, which was accorded the status of infrastructure in the budget for 1997-98, has now been offered more concessions by finance minister P Chidambaram. These include extending the benefit of additional tax rebate to investment in the telecom sector and reliefs in amortisation of expenditure incurred as fee for obtaining licences. The benefit of allowing amortisation of expenditure incurred as fee for obtaining licences to operate telecommunication services had been allowed effective April 1, 1998. The facility would now become available effective April 1, 1996. It has been fixed because the first telecom licence was issued on this date. The finance minister further announced that in respect of capital goods not produced within the country there will be a customs duty of 20 per cent plus 2 per cent special customs duty, but they will be exempted from CVD for a period of two years. Chidambaram, who had received several representations from the telecom industry during the last one month, while winding up the debate on the Finance Bill, said he was responding to the pleas by allowing more reliefs to the sector. States to receive 28% of pooled taxes; 1% incentive for prudent fiscal management Industry bodies welcome FM sops: Leading industry associations on Wednesday welcomed the new excise and concession sops including the measures for redress of concerns of the capital goods industry, announced by finance minister P Chidambaram in the Lok Sabha, while presenting the Finance Bill, 1997, for consideration.

Confederation of Indian Industries (CII) president N Kumar said the correction of anomalies in the duty structure relating to machine tools, catalytic converters and ferro alloys was a step in the right direction, adding that chamber's several post-budget recommendations were accepted.

He said the lowering of customs duty on raw materials for catalytic converter at 5 per cent would promote indigenisation.

The All India Association of Industries also welcomed the new concessions and budgetary support given to the pending power projects as well as to Power Finance Corporation to the tune of Rs 900 crore.

AIAI president Vijay G Kalantari said the concessions announced in regard to customs and excise duties and restoration of benefits to various industrial sectors would provide impetus to these sectors.

Besides this, he said , the finance minister's intention to discuss the service tax before implementation with the concerned sectors would avoid the cascading and adverse effects as envisaged.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.