| Q.1
|
What
is the taxable service in respect of telecom services? |
| Ans.
|
Taxable
service in respect of telecom sector is the service provided
to a subscriber by the telegraph authority in relation to a
telephone connection. |
| Q.2
|
What
is the value of taxable service in case of telephone services? |
| Ans.
|
In case
of Telephone Services, the value of taxable service is the gross
total amount (including adjustment from any deposits, surcharge,
etc.) charged by the telegraph authority to the subscriber in
the bills. Authority :- Board Circular No.29/3/99 dated 15.07.99,
F.No.149/5/97-CX.4. |
| Q.3
|
Is there
any exemption for any sector in Service Tax on telephone services? |
| Ans.
|
Yes, the
telephone services provided to the following are exempted from
payment of Service Tax
-
U.N. or an International Organisation.
-
Specified diplomatic mission
or its Members.
-
Departmentally run public telephones
for local calls.
-
Guaranteed public telephone
only for local calls.
-
Free telephones at Airports
and Hospitals where no bills are being issued. –
{Authority:- Notfn.3/94-ST dt. 30.6.94, 5/96 dated 3/4/96 and
13/97 dated 14/02/97} |
| Q.4
|
In cases
of plastic roaming facility introduced by Cellular Phone Companies,
who would be liable to pay the service tax – the operator (home
operators) with whom the customer have subscribed or the operator
(service operator) where the customer is visiting? |
Ans.
|
In the case
of plastic roaming facility, the liability to pay Service Tax
is on the home operator (home network), to whom the subscriber
is attached, as he is the one, who arranges roaming facility
in other metro cities through arrangements with the service
operators (visiting network). |
| Q.5
|
Is the
rent and access charge for providing junctions for mobile operation
to cellular telephone operators by DOT will be subject to Service
Tax. |
| Ans.
|
No, the
Service Tax is not chargeable on rent and access charges paid
to DOT by cellular phone operators. |
| Q.6
|
Is the
cost of Sim Card excludible from activation charges to be collected
from subscribers for the purposes of levy of Service Tax? |
| Ans.
|
No, The
amount received by the cellular telephone Company from subscribers
towards Sim Card would form part of the taxable value for levy
of Service Tax. As the sim Card unlike the telephone instrument
cannot be purchased by the customer from elsewhere, the charges
towards the Sim Card are viewed as processing charges for activating
the cellular phone. |
| Q.7
|
Whether
a prepaid SIM card is chargeable to Service Tax ? |
| Ans.
|
Yes. All
the prepaid SIM cards are chargeable to Service Tax. |
| Q.8
|
Whether
the free telephone provided by a telephone company to their
employees and friendly users from whom they do not recover any
charges are liable for payment of Service Tax. |
| Ans.
|
No, when
the service is provided free, there is no liability under Service
Tax |
| Q.9
|
Whether
the cellular company can allow discount on their air-time charges
and in such cases are they eligible to pay tax only on reduced
amount? |
| Ans.
|
Yes. In
cases where the telegraph authority has extended services at
a discounted price, the Service Tax liability is limited to
the discounted price so charged. |
| Q.10
|
Is Service
Tax leviable on the interest accrued on refundable deposits? |
| Ans.
|
No, interest
earned on refundable deposits has got no nexus with the value
of taxable service. Therefore, the Service Tax is not leviable
on interest earned on refundable deposits. |
| Q.11
|
In respect
of Secondary Switching Areas, what would be relevant date for
the purpose of calculation of interest in the event of late
payment of tax ? |
| Ans.
|
The first
date on which the Secondary Switching Areas makes the book transfer
to the DOT would be taken as the date of crediting to the Central
Govt. for the purpose of assessment and calculation of interest. |
| Q.12
|
Q. Whether
the value of taxable service provided by Telephone department
and those provided by pager companies would include the surcharge
collected on delayed payment for charging service tax.? |
| Ans.
|
The value
of taxable service in relation to Telephone and Pagers is the
gross total amount charged from the subscribers by the Telephone
authority. Since the surcharge is also an amount charged from
the subscribers. Whenever the subscriber fails to pay the bill
within the prescribed period; the service tax shall also be
chargeable on the surcharge amount.
( Authority : Board circular No.29/03/99 dt.15.07.99 )
|
| Q.13
|
Are the
Public Mobile Radio Trunking (PMRT) services covered under the
service tax net? |
| Ans.
|
In common
parlance 'Telephone' is understood to mean as transmission of
speech to a desired person beyond the limits of ordinary audibility.
Further a 'telephone connection' would mean connecting two telephone
apparatus so as to enable a caller to avail the speech transmission
facility to the desired person . PMRT also enables a subscribers
to transmit speech over long distance to a desired person. Further
PMRTS providers have been granted licence to operate their services
under the first proviso to subsection (1) of Section 4 of the
Indian Telegraph Act 1885. Therefore, PMRTS providers can be
treated as telegraph authority within the meaning assigned to
it under Section 65 (49) of the Finance Act 1994 and the services
provided by them as the taxable services in respect of Telephone
connections.
Authority: DG(ST)'S letter F.NO. V/DGST/(21) (6) Tele/5/99
dt.20.08.99.
|
