SC grants telcos’ interest waiver on tax dues on licence fees
The HinduThe Supreme Court has given a major relief for telecom service providers, including Bharti Airtel, Reliance and Vodafone Idea, by waiving off interest due on income tax arising from an October 16, 2023 judgment, which held that telecom licence fee should be treated as entirely “capital in nature”. A Bench of Justices B.V. Nagarathna and Ujjal Bhuyyan agreed to a waiver of the interest levy after the assessees said payment of the tax demand from the year 2000-2001 was itself a “heavy burden”. After giving thoughtful consideration to the submissions, the Bench, in a four-page order dated May 17, published on Monday, directed that “since the judgment of this court is dated October 16, 2023, and having regard to the Telecom Policy, which commenced from the year 1999, the payment of interest for the period for which the tax demand is now to be met in respect of these cases stands waived”. The High Court had confirmed an Income Tax Appellate Tribunal finding that the variable licence fee paid by telcos under the 1999 policy was revenue expenditure and not capital.
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