Telcos’ Spectrum Buys Below Retro Tax Radar
No service tax on payments, in full or in parts, for waves bought before Apr 1
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.