2023 (12) TMI 48

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....oreign telecom operators (FTOs) for providing international roaming facilities to the subscribers of the appellant travelling to foreign countries. As per the agreement, a subscriber visiting a country where an agreement exists with a specified FTO can automatically make and receive calls, send and receive data, or access other services including home data services while travelling outside the geographical coverage area of the home network, by means of using a visited network. For providing these services, the FTO charges the Appellant at a rate as agreed between the parties as per the terms of the agreement. The Appellants pay the foreign telecom operators (FTOs) in foreign currency. 2. A Show Cause Notice dated 19.12.11 was issued to t....

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....ges paid to Foreign Telecommunication Operators (FTOs). The payment of roaming charges was made by them to FTOs for providing connectivity services to their subscribers when they are abroad. Thus, the services are rightly classifiable as 'Telecommunication Service'. It is submitted that during the relevant period only telecommunication services provided by a 'Telegraph Authority' to a person was taxable. In the instant case, FTOs by no means of construction can be brought within the ambit of 'Telegraphy Authority' as defined under Section 65(111) of the Finance Act, 1994 read with Section 3(6) of the India Telegraph Act, 1885, hence, under no circumstances roaming charges can be taxed under the head "Business Auxiliary Servi....

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....rding the service tax demand of Rs.61,69,700/- confirmed under the head "Business Auxiliary Service" on roaming charges paid to Foreign Telecommunication Operators (FTOs), we observe that the payment of roaming charges was made by the Appellant to FTOs for providing connectivity services to their subscribers when they are abroad. We find that the services are appropriately classifiable as 'Telecommunication Service'. During the relevant period, only telecommunication services provided by a 'Telegraph Authority' to a person was taxable. In the instant case, FTOs located abroad providing the connectivity services would not fall within the ambit of 'Telegraphy Authority' as defined under Section 65(111) of the Finance Act, 1994....

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....er tax under a different tax entry, namely, Business Auxiliary Service. We note examining an almost similar situation, the Board has categorically clarified vide letter dated 19-12-2011 that what otherwise constitutes telecommunication service cannot amount to any other taxable service. Further, we also note in parallel situation examining the tax liability of an activity, which is otherwise covered, in a tax entry, can be taxed under the category of another tax entry has been examined by the Hon'ble Kerala High Court in the case of Federal Bank Ltd. (supra). Here also we note that the telecommunication service liable to tax has been exhaustively defined and admittedly, the services now under consideration are specifically covered in the sa....