In re Vodafone Idea Limited (GST AAR Telangana)
Supply of telecommunication services to a local authority is a taxable service
The AAR, Telangana in the matter of M/s. Vodafone Idea Limited [TSAAR Order No. 36/2022 dated July 11, 2022] ruled that the supply of telecommunication services to a local authority is a taxable service under Section 9(1) of the Central Goods and Services Act, 2017 (“the CGST Act”) and is not exempted under Notification No. 12/2017- Central Tax (Rate) dated 28 June 2017. (“the Services Exemption Notification”). Held that, there is no direct relation between the services provided by the assessee and the functions discharged by the local authority under Article 243W read with Schedule 12 to the Constitution of India.
Facts:
M/s Vodafone Idea Limited (“the Applicant”) is engaged in providing telecommunication services and in the course of its business, it is also providing these services to the Greater Hyderabad Municipal Corporation (“GHMC”), a local authority, by way of data/voice telecommunication services under SAC 9984, to be used by employees for general office and administrative purposes.
The Applicant submitted that, the services provided qualify to be pure services rendered in relation to functions entrusted to a municipality under Article 243W of the Constitution of India under SI. No. 3 of the Services Exemption Notification, and hence, are exempt from tax.
Issue:
Whether the supply of ‘telecommunication services’ to the GHMC is a taxable service or is exempted vide SI. No. 3 of the Services Exemption Notification?
Held:
The AAR, Telangana in the matter of TSAAR Order No. 36/2022 held as under:
