Telecommunication service tax could not be levied on international roaming from unlicensed foreign telecom providers.

Service tax on international roaming services was analysed under the telecommunication service entry, which applies only where the service is provided by a person qualifying as a telegraph authority licensed under the Indian Telegraph Act. Foreign telecom service providers located abroad and lacking such licence do not satisfy that statutory definition, and board instructions with later clarification supported their exclusion from this tax head. On that basis, the demand under telecommunication service could not be sustained, and the levy on international roaming services was held not payable.

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Issues: Whether service tax could be demanded on international roaming services received from foreign telecom service providers under the head of telecommunication service.

Analysis: The liability under the telecommunication service provisions arises only when the service is provided by a person qualifying as a telegraph authority licensed under the Indian Telegraph Act. The foreign service providers, being situated abroad and not holding such licence, do not fall within the statutory definition of telegraph authority for the relevant taxable service. Board instructions and later clarification also supported the view that foreign vendors were outside the taxability clause of telecommunication service. On that basis, the demand under telecommunication service could not survive.

Conclusion: The demand of service tax on international roaming services was not sustainable and the issue was decided in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal succeeded.

Ratio Decidendi: Foreign telecom service providers who are not licensed as telegraph authorities under the governing telecom statute cannot be taxed under the telecommunication service entry.

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