Telecom companies will have to pay GST along with their instalments towards spectrum charges, a senior official stated. The Department of Telecom (DoT) plans to hold the next spectrum auction on June 6, featuring eight bands intended for mobile phone services. The base price for the auction is set at Rs 96,317 crore.
The spectrum, which will be assigned for 20 years, allows successful bidders to make payments in 20 equal annual instalments. According to the official, telecom companies will need to pay an 18 percent Goods and Services Tax (GST) with each instalment. “The GST Council is likely to clarify the procedure for GST payment by companies winning bids in the upcoming spectrum auction at its next meeting,” the official told PTI. This clarification aims to resolve confusion about the GST collection method during the auction process.
The available spectrum in the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz bands are included in the auction. The total base price value of these frequencies is Rs 96,317 crore.
Rajat Mohan, Executive Director at AMRG & Associates, explained that under GST law, spectrum payments fall under licensing services for the right to use natural resources, which are taxed at 18 percent. “Spectrum charges are payable in a phased manner over time, and thus tax payments should also be staggered. The board should issue a clarification to avoid any litigation in this regard,” Mohan added.
