27 Jun CBIC Circular No. 222/16/2024-GST: Time of Supply Clarification for Spectrum Usage
The CBIC has issued Circular No. 222/16/2024-GST dated June 26, 2024, clarifying the time of supply for services related to spectrum usage and similar services under GST. This clarification addresses scenarios where telecom operators opt for deferred payment options for spectrum allocation, as per the Frequency Assignment Letter (FAL) issued by the Department of Telecommunications (DoT), Government of India.
Key clarifications provided include:
- Time of Supply: GST liability arises when telecom operators make payments for spectrum usage. For upfront payments, GST is payable when the payment is made or due, whichever is earlier. For deferred payments in installments, GST is payable on each installment payment date or when due, whichever is earlier.
- Continuous Supply of Services: Spectrum allocation under FAL constitutes a continuous supply of services as per CGST Act, defined under section 2(33). Therefore, GST application aligns with periodic payment obligations specified in the FAL.
- Invoice Requirements: In cases of continuous supply, invoices must be issued on or before the due date of each payment installment, as ascertainable from the contract terms.
- Similar Treatments: This clarification applies similarly to other government allocations of natural resources involving continuous supply agreements with payment options, either upfront or deferred.
Field formations are advised to disseminate this Circular’s contents widely through suitable trade notices.
For detailed information, refer to the Circular here
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