Service Tax from ILDOs - Not applicable to BSNL

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No 1002-62/2OOZnaxatrontesNl/
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CGMM STRAIVTR/N rR/Frflt MH circle /Chennai Telephones
BHARAT SANCHAR NIGAM LIMITED
lA (iovernmr:nt of Inclia linlerrlrisr:i
--*--'_-_o-a&q-Lq-q1.?A]2-'
sub: Applicability of service Tax on Telecommunication service received from
ILDOs {Foreign Telecom Operators) by BSNL *reg.
Ref I his office ietter n0
(Annexure_,,
1002-6212007/l axatton,r[lsNl /257 Dated. :Solo7r,aaE
Kindly refer to letter crted above whereby cBEC,
No
MOF
111110512a09-sT
Govt. of Indra
was circulated
circular
and intrmaied that Service tax is not revrable on
I!fti**unication servrce received from rLDo; froreign Terecom cperators) by
Incidentally rt rs stated that, CBEC had issued crrcutar vide
service
F
tax
No. 13/21
Dated
Da11-
Julv.]5, 2011 ( Ao0sxl{:ejl) anJ ctarified
Prlvate
that the
L'eased
International
circuit (IPLC) charges receivedlrom abroad rs
tax
chargeable
under Business
to service
Support ServrceJsection 65(lOSifzzzqiL at the franOs
sttuated rn
of reciprents
Incjia in terms of sec 664 of the [:rnance Act 1gg4 read
of
with
tl!e
Rule
Servrce Tax
2(1)(rJ)(iv)
Ruies 1gg4 and provislons of Taxatron of .gsrvls6s (provrded)
oLltSlde Indra anC recerved p
from
lndra Rules 2006 apply
ijowever thrs matter has been re_examrned by Ci3L:C MOF, Govt
ts
of
clarifled vide
IncJiand it
F NC 13112,112011-Service tax Dated December jg 2011 that,
i-stpLC
specifically covered by the definition of Telecommunrcation service given rn
65[109a(rv)]
clause
of the Fjrnance Act 1994. As per said section these services are taxable
otrly when provided by a person who has been granted a lrcence under the frrst provtso
to sub section (1) section 4 of the Indian Telegraph Act, 1g85. lt is only because the
foreign telecom servtce provider cannot constitute a telegraph authority ,ndul- an Indian
law that they remarn outside the taxability clause of the ietecommunication servrce
( Copy rs enclosed as AnlgXUtQ:[l)
Hence tt rs clarified that Service tax is not applicahle on Telecommunication
service received from ILDOs (Foreign Telecom operators) by BSNL. cB[c
Circular dated 1g 122011 nrentioned above may kindly be broughto the 'otrce of ail
concerned and produced before the Central Excise/ Senyrce Tax author.ities. if needed
Encl As above
Copv for rnformatron and necessarv action to
1 CGM of all BSNL Crrcles
2 lFAs of all BSNL crrcles
3 Sr cM(lt-D). BSNL CO New Dethi
. t rl'L '
( Smita Choudhary)
GM(Taxation)

CORPORATE OFFICE
TAXATION SEC'I'ION
Isl'IILOOR,
BHARAT SANCIIAR BHAWAN
.]ANP,A'I'II, NIi\\' DDI-FIJ. I
No: 1002-62 / .\OOT lTaxaii;n/
To
M
BHARAT
i
-:ll.
::11'j**
BSNL/zs,z
-/--
SANCHAR NIGAM LIM]]'IIDD
[A Government of Inclia Enterprise]
I
I
i
i
I
I
(1) IFA, o/,, g6'14, western Maintenance Region, BSNL, Mumbai.
(2) GM(F), t i/o cGM Information Technolugip.o3".t circle ,BSNL,pune-l!)
sub: - Applic;rbitity of service tax on IUC invoices of rLDos _ reg.
Ref:- 1) GM(Fl, IT Projecr Circle pune letter no. ITpC,/ IOBAS/tL DO /2OO7 _C)B
Dated 28.O9.2OO2 &
1,2
3 l.OT .2OOT.
2) cGMIu, wrR retter no. wrR/cA/S.raxlcenvat credit
Datecl 29.O9.2OOT
l2oor-oBl2T
.
3) This t,'l'fice letter of even no. 06 Dated 02-o1-2008 ancl 397 Dateci I1-
07-2008.
I(indly rcfer this office letter of even no.06 Dated 02-01-200g wherein it
was tntimalcti that the case has been referrecl to cBEC, New Delhi for seeking
clarification

f
,ao,u ).r.,dr
il 'i--
F.No. 137 / 2t / ZO1 1-Service Tax
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
New Delhi
Dated: July 15,2011
Subject: Taxabrlrty rn respectof International privateLeased amendment rn
Circuit (IpCL)
lhe definrtion
charges and
of Telegraph Authority u/s
rpn
65 (111) of the Finance Acr,
'
rgg4-
vy.
Representatrons have been received seeking clarificatrorr
charges
regarding
incurred
taxability
in foreign
of IpcL
currency by BPoTMNCs against
servtce provider
recelpt of servrces
situated
from
outslde
the
India/group companLs under reverse
lsectron 664 of the
charge
Finance
mechanisrri
Act, 1994 read with Rule 2 (1) (d) (iv)
19941.
of the service Tax Rutes
'2' The matter has been examined. The actrvities are rn
presently
the nature of Lease

I
/\ 1'1]-r-1. x \.) r. "il
r;,:,Print thts paqc
I No. 137l21 /ZOtl' * Service Tax
Government of tndia
Ministry of Finance
Department of Revenue
{Central tsoard of Excise & Customs}
New Delhi,
Datr:d: Decembr:r tr9, 2011
subject: Taxability in respect of International Private Leased circuit {lpl-c} r:harges and amenrJment in the
definition of Telegraph Authority uis 6r {I11) of the Finance Acr, L994* reg"
Pieaser refer tr: the'rlarifir..;ttcln'; ir;sLted vrrie i.loard's letter of even number daterr 1\ {)7)o1l on the lubiect
mentroned;)bove
7].Iht.rn;ltter|t;lsbeenrei]X.)n1|nt'].J.]|l{:;1's.;e€]ntha1theiPl'i-i.;specifrca||i,r'i;vtlrcrJbythedefinitiirloft|ltl
lelerr.ommllrrir-ation servic(' gir,'en irl r:l;;ustr 55 i109a(iv)] of the Finance Act, irl9.4 As pet" tirtt said secrron the.;e
servtr:es are tax;rblc only whertl 5ltr.rvtrletrl tly,r prtrson who has beerr Jl,rantert.i lic.r,nce irnder t!.re firsl r;rovr.;6 i6
sub-:;oction(1)r;ist'ction4of thelndiarr lelegraphAcl, 1985. ltisonlybecaLrselheforeigrrteiecomssrvi(.c
prtlvider cailnot constiti.rte a telegraph aUflroiltV unrjer an Indian law that Lhcv rerrJin outsicje thr: iaxabilitv
cla t t sc of f fr o I r,: I er:ctrrr m u r r il:;lti o n srl r.vi t.e.
li. Therefrlrtl, iiti'view takel il Llre s.ricJ letier thal what orherwrscl
woulci antortnI io "ilusiness.il.tpfJ()rl rervir:e' is e,rroneous,
(.onstrtr.tto\ n
" 1 eit'r onrrn llrr ication sc.rvice:
4 Ihe r:larifit,)ttot) tssue(l rrrcle lhr:,rbove rnenlioner,. letter sl,trrrls r{)ar{.clecl ,ri citrr_.tingly
Deepankar Aron
Director {Service Tax}
CBEC, trlew Delhi