Assam's 4% entry tax may rock BSNL’s North-East plan

KOLKATA: State-owned BSNL’s expansion plans in the picturesque North-East could run into rough weather. The telecom major faces the prospect of huge time and cost overruns as loads of IT/telecom gear meant for its mobile, broadband and landline capacity build-up seldom reach these parts on time. The reason: a 4% entry tax that the Assam government levies on every piece of telecom/IT gear that enters the state.

At present, BSNL buys nearly Rs 2,000 crore of project gear every year to ramp up communication infrastructure in these insurgency-prone states, but the bulk of it rarely gets past Guwahati on time.

Since not a single box of telecom equipment can enter any north-eastern state bypassing Assam, critical gear worth hundreds of crores bound for Mizoram, Tripura, Manipur, Meghalaya, Manipur or Aurnachal Pradesh have been lying idle for months in Guwahati. This is despite the fact that none of the north-eastern states levy a similar entry tax on the IT/telecom gear shipments.

Worse, ever since Mizoram, Meghalaya and Tripura were declared troubled zones, all IT/telecom gear meant for BSNL’s operations in these circles have invariably gathered dust in its warehouses in Assam.

“The 4% entry tax levied by the Assam government is proving to be a major deterrent that is hurting BSNL’s operations and expansion plans in Assam and North-East. Not only is it a huge additional cost that jacks up the final cost of delivering telecom services in Assam, it also delays all our equipment shipments headed for the six north-eastern states since Assam cannot be bypassed,” said a senior BSNL official with direct knowledge of the problem in the region.

“As a result, the gamut of equipment meant for BSNL’s mobile, landline and broadband networks in the north-eastern circles piles up for months in Guwahati as the cargo is seldom cleared expeditiously by the Assam authorities. This is hurting BSNL operations in the North-East circles,” he added.

BSNL buys some Rs 1,000 crore of telecom/IT instruments for its Assam operation alone every year while another Rs 800-1000 crore of gear is procured for the remaining six north-eastern states. The gear is a mix of BTS, BSCs, MSCs, optic fibre cables (OFC), core control gear, end-terminal equipment, which is particularly critical to BSNL’s mobile and broadband expansion plans in the region.

“Since Tripura, Meghalaya and Mizoram have been declared troubled locations, all BSNL equipment meant for these circles have to be stocked in our designated warehouses in Guwahati. It often takes months to ship critical project equipment from Guwahati to the north-eastern circles,” said another BSNL executive based in Assam.