New Delhi: Telecom companies will have to pay GST along with the installment paid for spectrum charges, a senior official said.
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 allotted for 20 years and successful bidders will be allowed to make payment in 20 equal annual installments in the upcoming mega auction.
The official said telecom companies will have to pay 18 percent goods and services tax (GST) with each installment.
"The GST Council may clarify the process of GST payment by companies winning the bids during the spectrum auction in its next meeting," the official said.
The clarification will eliminate confusion among field officers regarding the manner of GST collection in the auction process.
All available spectrum in the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,30 MHz, 2,500 MHz, 3,300 MHz and 26 GHz bands are part of the auction.
The total frequency value at base price is Rs 96,317 crore.
Rajat Mohan, executive director of Moore Singhi, said that 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.
Mohan said, "Spectrum charges are payable in a phased manner over a fixed period, due to which the tax payment will also vary. The Board should issue a clarification in this regard so that any litigation in this regard can be avoided."
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 allotted for 20 years and successful bidders will be allowed to make payment in 20 equal annual installments in the upcoming mega auction.
The official said telecom companies will have to pay 18 percent goods and services tax (GST) with each installment.
"The GST Council may clarify the process of GST payment by companies winning the bids during the spectrum auction in its next meeting," the official said.
The clarification will eliminate confusion among field officers regarding the manner of GST collection in the auction process.
All available spectrum in the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,30 MHz, 2,500 MHz, 3,300 MHz and 26 GHz bands are part of the auction.
The total frequency value at base price is Rs 96,317 crore.
Rajat Mohan, executive director of Moore Singhi, said that 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.
Mohan said, "Spectrum charges are payable in a phased manner over a fixed period, due to which the tax payment will also vary. The Board should issue a clarification in this regard so that any litigation in this regard can be avoided."
