GST Impact on telecommunication / Mobile operators
Place of Supply – Under the GST Law, certain guidelines are provided to determine place of supply for the telecom companies/sector as detailed below;.
|Item||Place of Supply|
|Prepaid mobile Vouchers||Location where the pre-payment is received or the voucher is sold.
|Mobile Recharge made through internet banking/electronic mode of payment||Location of service recipient on record of suppliers.
|Post-paid mobile / internet services of Post-paid mobile||Billing address of the subscribers.|
|Fixed Line/leased circuit/internet leased circuit cable or dish antena,||Point where the line circuitor cable connection was installed for receipt of services.
GST Impact on telecommunication / Mobile operators : CBEC FAQs brings clarity
CBEC vide FAQs on GST : Clarified the Following Question No 15 in Place of Supply Chapter
Q 15. What will be the place of supply for mobile connection? Can it be the location of supplier?
Ans. The location of supplier of mobile services cannot be the place of supply as the mobile companies are providing services in multiple states and many of these services are inter-state. The consumption principle will be broken if the location of supplier is taken as place of supply and all the revenue may go to a few states where the suppliers are located.
The place of supply for mobile connection would depend on whether the connection is on postpaid or prepaid basis.
In case of postpaid connections, the place of supply shall be the location of billing address of the recipient of service.
In case of pre-paid connections, the place of supply shall be the place where payment for such connection is received or such pre-paid vouchers are sold. However if the recharge is done through internet/e-payment, the location of recipient of service on record shall be the taken as the place of service.
Education Guide on Goods & Service Tax (GST)