Case Law Details
Mahanagar Telephone Nigam Ltd. Vs Union of India And Ors. (Delhi High Court)
Delhi High Court held that right to use radio frequency spectrum or its subsequent transfer covered under Clause (j) of Section 66E which was effective from 14.05.2016. Accordingly, compensation received during Financial Year 2015-2016 not leviable to service tax.
Facts- Mahanagar Telecom Nigam Ltd. (MTNL) – a Government of India enterprise engaged in the business of providing telecom services to subscribers in Delhi and Mumbai – has filed the present petition impugning a show cause notice dated 22.05.2018 issued to it, as ex facie illegal and without jurisdiction.
The principal controversy involved in the present case is whether MTNL is liable to pay service tax on the compensation of ₹458.04 crores received by it from the Government of India on surrender of spectrum – 800 MHz CDMA. The impugned show cause notice proceeds on the basis that the surrender of spectrum against compensation is a “declared service” under Section 66E(e) of the Act and is thus chargeable to service tax.
Conclusion- Thus, in view of the above, the assignment by the Government of the right to use radio frequency spectrum or its subsequent transfer does not constitute declared service under Clause (e) of Section 66E of the Act; it does so under Clause (j) of Section 66E of the Act.
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