Telecommunication service, data transfer, broadcasting, DTH within India :
The place of supply of telecommunication services including data transfer, broadcasting, cable and direct to home television services to any person shall be as follows [section 12(11) of IGST Act, 2017].
(a) in case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna, be the location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services.
(b) in case of mobile connection for telecommunication and internet services provided on post-paid basis, be the location of billing address of the recipient of services on record of the supplier of services.
(c) in cases where mobile connection for telecommunication, internet service and direct to home television services are provided on prepayment basis through a voucher or any other means – (i) through selling agent or a re-seller or a distributor of Subscriber Identity Module (SIM) card or recharge
voucher, shall be address of the selling agent or re-seller or distributor as per the record of the supplier at the time of supply; or (ii) by any person to the final subscriber shall be the location where such pre-payment is received or such vouchers are sold.
(d) in other cases [i.e. not covered in (a), (b) and (c) above, shall be the address of the recipient as per records of the supplier of the service. Where address of the recipient as per records of the supplier of service is not available, the place of supply shall be location of the supplier of service.
If such pre-paid service is availed or the recharge is made through internet banking or other electronic mode of payment, the location of the recipient of services on record of the supplier of services shall be the place of supply of such service- second proviso to section 12(11) of IGST Act.
Where address of the recipient as per records of the supplier of service is not available, the place of supply shall be location of the supplier of service – first proviso to section 12(11) of IGST Act.
Explanation: Where the leased circuit is installed in more than one State or Union Territory and a consolidated amount is charged for supply of services relating to such circuit, the place of supply of such services shall be taken as being in each of the States or Union Territories in proportion to the value of services so provided in each respective State or Union Territories in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in absence of such contract or agreement, on such other basis as may be prescribed- explanation to section 12(11) of IGST Act, 2017.
Meaning of telecommunication service – “Telecommunication service” means service of any description (including electronic mail, voice mail, data services, audio text services, video text services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electro-magnetic means – section 2(100) of IGST Act.
Clarification regarding tax on international in-bound roaming services – ‘Roaming’ in wireless telecommunication refers to extension of connectivity service in a location that is different from the location/network area of home network. It occurs when a subscriber of one wireless provider physically
moves to network area of another service provider. ‘International roaming’ refers to the ability of a subscriber to move to a foreign service provider’s network and use its network for making and/or receiving a telephone call. The call is routed through the visited network. A temporary internal number is assigned. CBE&C, vide circular No. 90/1/2007-ST dated 3-1-2007, had clarified that this service is ‘telephone connection’, even if actual telephone instrument or SIM card is not provided. This service is taxable. It is not ‘export of service’. Tax is payable by domestic telecom operator on amount received through home network of the subscriber on account of service provided to such international roaming subscriber .
However, in Vodafone Essar Cellular Ltd. v. CCE (2013) 39 STT 777 = 33 358 (CESTAT), this view has not been accepted. In this case, assessee provided telecom service in India to international inbound roamers registered with foreign telecom network operators, who were in India at the time of providing service. Assessee argued that he is providing service to foreign telecom service provider and not to their customers (subscribers) who use the telecom service in India. Hence, it is export of service. The claim of assessee was held valid. It was observed that your customer’s customer is not your customer. It was held that UK Vat Act and Australian GST law had similar provisions.