Allow carry forward of biz losses post amalgamation: TAIPA

Tower and infrastructure providers have urged the government to increase tax depreciation rate to 65 per cent on batteries for industrial and commercial use, and sought for benefits pertaining to carry forward of business losses post amalgamation, to be extended to tower companies.
"To create robust tower infrastructure, we recommend few amendments...Which can result into ease of doing business - subsidies, inclusion of petrol, diesel under GST regime, accelerated depreciation on solar and energy equipment, and that depreciation rate for batteries be increased to 65 per cent," Tilak Raj Dua, Director General, Tower and Infrastructure Providers Association (TAIPA) said.
TAIPA further said that the benefit of Section 72A -- which allows carry forward of business losses pursuant to approved merger and amalgamation -- should also be extended to tower companies just like it is allowed for telecom operators.

"Considering that the passive infrastructure industry is integral and inseparable from telecom industry and has also been conferred the status of infrastructure, an amendment under section 72A (of Income Tax Act) is desired to the effect that the brought forward business losses of the amalgamating telecom tower companies shall be allowed to be carried forward with the amalgamated telecom tower companies," the association said in its Budget wishlist.
As telecom tower industry is an integral and inseparable part of telecom services, the specific inclusion will bring parity for the tower companies with telecom operators and other key industrial sectors, it added.

Hence, "it is recommended to include the telecom infrastructure service providers in order to provide the benefit of carry forward of business losses under section 72A in the cases of mergers and amalgamations", it said.

Another suggestion pertains to increase in tax depreciation rate from 15 per cent to 65 per cent on batteries for industrial or commercial use (used as power back up for telecom towers) to ensure cost recovery within three years' economic life of the batteries.
"We would like to highlight that these batteries get fully depreciated as per Companies Act over a period of 3 years...We would like to recommend that the depreciation rate should be increased to 65 per cent so that the 95 per cent cost can be depreciated over three years which is an average life of such batteries," it said.

TAIPA further recommended maintaining the limit of accelerated depreciation on solar and energy saving equipment at 80 per cent to promote use of solar energy.
"Petroleum and diesel should be brought within the ambit of GST so that the duties paid on it are available as 'credit'.
"Alternatively, till the time petroleum products and electricity are not brought under the GST regime, deemed credit mechanism should be prescribed, the quantum of which could be based on a percentage of the state levies paid." TAIPA added.