Tel­cos’ Spec­trum Buys Be­low Retro Tax Radar

No ser­vice tax on pay­ments, in full or in parts, for waves bought be­fore Apr 1

The Economic Times - - Front Page - Our Bureau

New Delhi: The govern­ment has clar­i­fied that tele­com com­pa­nies won’t have to pay ser­vice tax on pay­ments for spec­trum pur­chased be­fore April 1, even if th­ese are be­ing made in in­stal­ments, in what ex­perts said would come as a sig­nif­i­cant re­lief for the in­dus­try.

The govern­ment has also al­lowed tel­cos to claim credit for taxes in three years in­stead of the en­tire life­cy­cle of the spec­trum but has stayed firm on the levy on fu­ture auc­tions.

The Cen­tral Board of Ex­cise and Cus­toms (CBEC) has said pay­ment, whether in full up- ser­vices to biz was brought un­der tax net

Right to use

spec­trum pro­vided by govt treated as ser­vice

By that rea­son­ing,

ser­vice tax is levied on spec­trum pay­ment front or in in­stal­ments for as­sign­ment of the right to use such spec­trum, has been ex­empted from ser­vice tax.

The clar­i­fi­ca­tion was is­sued af­ter a Bud­get pro­vi­sion made all govern­ment ser­vices in­clud­ing auc­tions taxable.

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