Telecom SectorSAC 9984

GST on Telecom Services — Rates, ITC & Place of Supply

Complete guide to GST on telecommunications: mobile services at 18%, handsets at 12%, DTH/cable TV, tower infrastructure, OTT platforms, international roaming, place of supply rules, and ITC for telecom operators.

18%

Telecom Services

18%

DTH Services

12%

Handsets

18%

SIM Cards

18%

Tower Infra

18%

ISP/Broadband

18%

Roaming (Intl)

18%

OTT Services

GST Framework for Telecom

Telecom Services at 18% GST

All telecommunication services — voice calls, SMS, mobile data, broadband, leased lines — attract 18% GST. This applies uniformly to prepaid, postpaid, and enterprise plans. The service tax era rate was 15% (14% ST + 0.5% SBC + 0.5% KKC), so GST increased the effective rate by 3 percentage points.

Place of Supply — Telecom

Place of supply for telecom services is determined by: (1) Postpaid — billing address of recipient, (2) Prepaid — location where recharge/top-up is sold, (3) If via agent — agent's location. For international roaming, place of supply = location of first subscriber (Indian number = taxable in India).

ITC for Telecom Operators

Telecom companies (Jio, Airtel, Vi, BSNL) can claim full ITC on: network equipment (towers, switches, routers), fiber optic cables, spectrum auction payments (post-2021 clarification), electricity for towers, IT systems, and rented premises. ITC on tower construction was initially disputed but later allowed.

DTH & Cable TV

Direct-to-Home (DTH) and cable TV services attract 18% GST. Set-top boxes are taxed at 18%. Cable operators pay GST on subscription fees collected from customers. Multi-system operators (MSOs) and local cable operators (LCOs) both need GST registration if above threshold.

Mobile Handsets at 12%

Mobile phones and smartphones attract 12% GST (HSN 8517). Accessories (chargers, earphones, cases) attract 18%. This makes India one of the lowest-taxed markets for handsets globally. Feature phones and smartphones both at 12% — no differentiation based on price point.

Tower Infrastructure & Sharing

Telecom tower companies (Indus Towers, ATC India) charge 18% GST on tower sharing/infrastructure services. Passive infrastructure sharing (tower, space, power) is taxed as a supply of service. Active infrastructure sharing (spectrum, antenna) also at 18%. Long-term tower leases are treated as supply of service, not immovable property.

Telecom GST Rate Table

Service/Product	SAC/HSN	GST Rate	Notes
Voice/SMS/data (prepaid)	9984	18%	All telecom services
Voice/SMS/data (postpaid)	9984	18%	Same rate as prepaid
Broadband/ISP services	9984	18%	Fiber, DSL, wireless
Leased line/MPLS	9984	18%	Enterprise connectivity
DTH services	9984	18%	Tata Play, Airtel Digital
Cable TV subscription	9984	18%	MSO/LCO charges
Mobile handsets	8517	12%	Smartphones & feature phones
SIM cards supply	9984	18%	Treated as telecom service
Tower sharing services	9972	18%	Passive infra sharing
OTT streaming (Netflix etc)	9984	18%	OIDAR service
International roaming	9984	18%	POS = subscriber location
VAS (value-added services)	9984	18%	Ring tones, caller tunes

Frequently Asked Questions

What is the GST rate on mobile recharges and phone bills?

All telecom services (mobile recharge, postpaid bills, broadband, DTH) attract 18% GST. This applies uniformly — whether you're on prepaid or postpaid, the GST component is 18% of the plan value. For example, a ₹239 recharge includes ~₹36 as GST (18% of base value ₹203).

Can telecom companies claim ITC on spectrum payments?

Yes, after a 2021 clarification. GST paid on spectrum auction payments (deferred installments) is eligible for ITC. Earlier there was a dispute, but the government confirmed that spectrum is a supply of service (right to use) and IGST paid on it is creditable. This was a major relief for telecom operators.

How is place of supply determined for telecom?

Postpaid: billing address of recipient. Prepaid: location where recharge is sold (distributor/website). If via agent/distributor: agent's registered address. International roaming: subscriber's home location (Indian number = Indian GST applies). B2B leased lines: recipient's registered place of business.

What about GST on OTT platforms like Netflix, Hotstar?

OTT streaming services (Netflix, Disney+ Hotstar, Amazon Prime Video) attract 18% GST as Online Information and Database Access or Retrieval (OIDAR) services. Foreign OTT providers (Netflix, etc.) must register for GST in India and collect 18% on B2C supplies to Indian consumers.

Telecom Billing GST — Fully Automated

Laabam.One handles telecom expense GST reconciliation, ITC claims on phone/internet bills, place of supply determination, and multi-state compliance for distributed teams.

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