Financial support to Mahanagar Telephone Nigam Limited on account of liability arising from levy of Minimum Alternate Tax

No: ----- Dated: Oct, 18 2014

Financial support to Mahanagar Telephone Nigam Limited on account of liability arising from levy of Minimum Alternate Tax

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for a proposal of the Department of Telecommunications to provide financial support to Mahanagar Telephone Nigam Limited (MTNL) due to its liability arising from levy of Minimum Alternate Tax (MAT).

On account of recent decisions of the Government which includes payment of pension to erstwhile government employees absorbed in MTNL and who opted for combined service pension and financial support on surrender of Broadband Wireless Access (BWA) spectrum. MTNL has earned a book profit of Rs 2348.49 crore for the FY 2013-14, resulting in a minimum alternate tax liability of Rs 492.26 crore. The objective of this approval is to provide one time financial support to MTNL due to reimbursement of MAT during the financial year 2014-15 through requisite budgetary provisions.

This decision will help MTNL keep floating in the highly competitive telecom sector. It will also help MTNL arrange finances to meet its basic financial commitments like operations and maintenance of their telecom network.