Subject: Taxability in respect of International Private Leased Circuit (IPLC) charges and amendment in the definition of Telegraph Authority u/s 65 (111) of the Finance Act, 1994

PFA herewith of service Tax Circular against Taxability in respect of international private Leased Circular

F. No. 137/21/2011 – Service Tax

Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise & Customs)
New Delhi,

Dated: December 19, 2011

Subject: Taxability in respect of International Private Leased Circuit (IPLC) charges and amendment in the definition of Telegraph Authority u/s 65 (111) of the Finance Act, 1994 – reg.
Please refer to the clarifications issued vide Board's letter of even number dated 15.07.2011 on the subject mentioned above.
2. The matter has been re-examined and it is seen that the IPLC is specifically covered by the definition of the telecommunication service given in clause 65 [109a(iv)] of the Finance Act, 1994. As per the said section these services are taxable only when provided by a person who has been granted a licence under the first proviso to sub-section (1) of section 4 of the Indian Telegraph Act, 1985. It is only because the foreign telecom service provider cannot constitute a telegraph authority under an Indian law that they remain outside the taxability clause of the telecommunication service.
3. Therefore, the view taken in the said letter that what otherwise constitutes a “telecommunication service” would amount to “business support service” is erroneous.
4. The clarification issued vide the above mentioned letter stands corrected accordingly.

Deepankar Aron
Director (Service Tax)
CBEC, New Delh