GST on Telecom — Flat 18% on All Services, Spectrum Exempt

YES — 18% GST is included in ALL telecom charges. For PREPAID: the recharge amount is inclusive of GST. Example: ₹299 recharge → taxable value ₹253.39 + GST ₹45.61 = ₹299. You pay GST at time of recharge (advance payment for service). For POSTPAID: GST is charged ON TOP of usage. Your bill shows: usage charges + 18% GST = total payable. The ₹299 Jio/Airtel plan: ₹45.61 goes directly as GST to government. This is why effective per-day cost calculations should use pre-GST value. For businesses (B2B): this 18% is INPUT TAX CREDIT — can be claimed against output GST. For consumers (B2C): it's a cost. ISD calls, roaming, data packs — all 18% uniformly.

Spectrum auction: The government allocating radio frequency spectrum to telecom operators is a SOVEREIGN FUNCTION (regulatory assignment of natural resource). It's not 'supply of goods or services' under Section 7 of CGST Act. The payment is for RIGHT TO USE spectrum — treated as government's sovereign/regulatory function, not commercial activity. Hence: NO GST on spectrum auction price. However: License fee (% of AGR paid annually to DoT): This is a fee for the LICENSE TO OPERATE telecom business. It's a 'service' by government — covered under 'services by government to business entity' (Notification 13/2017). Hence: 18% GST under REVERSE CHARGE (telecom company self-assesses and pays). Similarly: Spectrum Usage Charges (SUC — annual recurring): 18% RCM. This distinction matters: one-time spectrum = sovereign, recurring license/usage = government service.

Bundled plans (e.g., Jio ₹999 plan with unlimited calls + 2GB/day data + JioTV + JioCinema): treated as COMPOSITE SUPPLY under Section 2(30). The principal supply is telecom service (voice + data). Entire bundle: 18% GST — no need to separate OTT/content component. The operator doesn't split: '₹800 for data/calls at 18% + ₹199 for OTT at 18%'. It's one supply at one rate. However: if OTT is sold SEPARATELY (JioCinema Premium subscription without Jio SIM): still 18% but as a separate supply of online content service. For MIXED SUPPLY (artificially bundled goods + services not naturally together): highest applicable rate — but telecom bundles are naturally bundled (composite), so single rate applies. Key: as long as the bundle is offered as a single price and elements are naturally connected, 18% flat. No benefit of lower rate on any component.

Tower companies (TowerCos — Indus Towers, American Tower Corp, Summit Digitel) provide: (1) Passive infrastructure (tower, shelter, DG, electrical): RENTAL service to telcos — 18% GST on monthly charges. (2) Energy/power supply (diesel, electricity pass-through): 18% GST. (3) Operations & maintenance: 18% GST. Indus Towers bills Airtel/Vi monthly per tower site: ground-based tower ~₹30-40K/month + energy ~₹15-20K/month → 18% GST on total ₹50-60K = ₹9-11K GST per site/month. With 200,000+ sites: TowerCos generate massive GST. ITC flow: TowerCo claims ITC on diesel (18%), electricity (if taxed), equipment (18%), civil works (18%) → passes 18% output. Telco (Airtel/Jio) claims ITC on tower rental against their 18% output on subscriber bills. This creates complete ITC chain — no cascading. Key issue: many tower sites have electricity metered to telco directly (no ITC available on electricity to TowerCo).