Service Tax Not Leviable On License Fee Or Spectrum Charges Payable For Period Before 1st April 2016: CESTAT

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that service tax is not leviable on license fees and spectrum charges that were payable by telecom companies for the period prior to April 1, 2016. The tribunal held that these payments, made by the telecom operators to the government for the right to use the spectrum, are not a consideration for any "service" provided by the government. The CESTAT observed that these are statutory charges or a share in the revenue of the telecom companies. It was only after a specific amendment was made to the law in 2016 that these charges were brought into the service tax net. The tribunal's ruling provides a major relief to the telecom industry, setting aside huge service tax demands that were raised for the period before this legal amendment.