Telecom companies will have to pay GST along with spectrum fee installments

New Delhi. Telecom companies will have to pay Goods and Services Tax (GST) along with spectrum fee. A senior official gave this information. The Department of Telecommunications (DoT) will hold the next round of spectrum auction for eight spectrum bands for mobile phone services on June 6. The base price for the auction has been fixed at Rs 96,317 crore. The spectrum will be allocated for 20 years and successful bidders will be allowed to pay in 20 equal annual installments in the upcoming ‘mega’ auction. The official said that telecom companies will have to pay 18 percent GST with each installment.

“The GST Council may clarify the process of GST payment by companies winning bids during spectrum auction in its next meeting,” the official told PTI. The clarification will end confusion among field officers regarding the method of GST collection in the auction process. All available spectrum in 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz and 26 GHz bands are part of the auction. The total value of frequencies being auctioned is Rs 96,317 crore.

Under the GST law, spectrum payments fall under licensing services for the right to use other natural resources, which are taxed at 18 per cent, said Rajat Mohan, executive director of accounting and consulting firm Moore Singhi, the Indian consulting arm of Moore Global. “Spectrum fees have to be paid in a phased manner over a fixed period. Hence, the tax payment will also be staggered. The board of directors should issue a clarification in this regard to avoid any litigation in this regard,” Mohan said.

Disclaimer: CricketInFocus has not edited this news. This news has been published from PTI-language feed.



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