NEW DELHI, Oct 22: The Department of Telecommunications (DoT) has turned down Iridium India Telecom Ltd's (IITL) request for recommending its case for zero customs duty on import of gateway equipment to the Finance Ministry. IITL had approached the DoT nearly two months ago requesting for a special permission for being allowed zero customs duty as the equipment was being imported for telecommunication purposes and hence should be treated as an infrastructure sector import.The DoT, it is reliably learnt, has stated that at the most the case can be recommended for a concessional duty of 22 per cent under the special provision for the infrastructure sector as against the 35 per cent duty charged for normal project imports. This would however upset the financial calculations of the Rs 350 crore IITL, the Indian counter part of the US based $ 4.5 billion Iridium satellite project. IITL is a joint venture between several Indian financial institutions and Motorola of USA for a global communication technology through satellites. Incidentally, the DoT has not yet granted licences to IITL though the cabinet had given its nod to the project to base one of its gateway stations in Pune which would be operated and maintained by Videsh Sanchar Nigam Ltd (VSNL).In fact, IITL had pointed out the VSNL's involvement in the project as one of the reasons for a positive recommendation from the DoT for a zero duty in project imports. However, the DoT has said that since the VSNL's involvement in the project is only concerned with operating and maintaining the gateway equipment, it cannot be considered as a VSNL project.The DoT has however, suggested a way out - the zero duty benefit can be provided if evidence is provided regarding VSNL's equity participation in the joint venture. However such a move may spell trouble for VSNL as any equity participation by the PSU required mandatory approval from the government. The US-based $ 4.5 billion Iridium system ism a satellite based wireless personal communications network designed to permit any type of telephone transmission - voice, data, fax or paging - to reach its destination anywhere in the world through a wireless hand held set carrying the same number even wherever an individual travelled across the world.
