Industry body COAI has urged the government for urgent rationalisation of "high burden" of regulatory levies on telecom service providers (TSPs), including a cut in spectrum charges and licence fee, as it cited adverse impact of the COVID-19 pandemic on the sector.

In a letter to Finance Minister Nirmala Sitharaman, the Cellular Operators' Association of India (COAI) also made a plea for refund of the unutilised input tax credit immediately.

"Else, we request that soft loan at MCLR rate (marginal cost of funding-based lending rate) should be given to companies, using the GST input credit as collateral," COAI Director General Rajan Mathews said in the letter dated June 26.

The association has also urged the government to rationalise the "high burden of the regulatory levies on the TSPs with immediate effect" citing "the adverse impact on the economy and operations of the digital communication industry due to the COVID-19 pandemic".

"The effective rate of the spectrum usage charge (SUC) should be reduced by 3 per cent for all the telecom service providers...licence fee contribution should be immediately brought down from 8 per cent to 3 per cent," Mathews said.

On the issue of good and service tax (GST) or service tax, COAI said levy of GST should be exempted on licence fees, SUC and payment of spectrum acquired in auctions.

"Exempt service tax on amount of licence fee/spectrum usage charges payable by telecom operators in compliance with...Supreme Court order," COAI said.

COAI highlighted that it represents all leading telecom service providers, network equipment manufacturers, e-commerce, digital content providers, infrastructure providers and technology partners.

All leading players in these sectors, including Reliance Jio, Vodafone Idea, Bharti Airtel, Nokia, Ericsson, Sterlite, Indus, Cisco, Facebook, Google, Amazon, are members of COAI.