New Delhi: Telecom companies will have to pay VAT together with the terms paid to spectrum charges, a senior official said. The department of Telecom (Point) will hold the next round spectrum auction on June 6 before eight spectrum bands intended for mobile phone services. The base price for the auction has been set 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 during the upcoming mega auction.
The official said telecom companies will have to pay a Goods and Services Tax (GST) of 18 percent on every installment.
“The GST Council The next meeting is likely to clarify the procedure for payment of GST by companies winning the bids during the spectrum auction,” the official told PTI.
The clarification will end the confusion among field formations regarding the method of collecting GST during the auction process.
All available spectrum in the bands 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz and 26 GHz is part of the auction.
The total frequencies under the hammer are valued at Rs 96,317 crore on base price.
Moore Singhi director Rajat Mohan under the GST law, spectrum payment falls under licensing services for the right to use other natural resources, which are taxed at 18 percent.
“Spectrum charges have to be paid in a phased manner over a period of time and hence the tax payment will also be spread out. The board should clarify this to avoid any litigation in this regard,” Mohan said.
