The Hindu Business Line : International roaming to attract service tax

The Finance Ministry wants to make it clear that domestic telecom operators would have to fork out service tax on the international roaming services provided by them to people coming in from abroad. It has said that revenues from such services cannot be treated as export earnings.

A draft circular from the Central Board of Excise and Customs (CBEC) has said that the service tax would be applicable on the amount received through the home network on account of service provided to such international roaming subscribers.

A CBEC spokesperson said that the draft circular has been issued in the wake of a doubt raised on the applicability of service tax on international in-bound roamers under telephone services. The draft circular is in the nature of a clarification and the Finance Ministry has invited comments on the same from stakeholders.

It has noted that this service to in-bound roamers is delivered and consumed in India and therefore cannot be treated as export of service.

When contacted, Mr T.V. Ramachandran, Cellular Operators' Association of India said that service tax is already being charged from inbound international roamers since April 2006. "The operators have incorporated the 12 per cent service tax as part of the roaming tariffs charged from international roamers coming into India. Since this does not impact Indian cellular users in any way we have not raised any objections to the move to collect service tax from inbound roamers," said Mr Ramachandran. COAI represents the interests of the GSM-based cellular operators in the country.

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