Licence fee: Telcos may file plea in SC

HIT BY AN adverse order on the treatment of licence fee, telecom operators are likely to file a review petition in the Supreme Court. The plea will be on on the lines of the adjusted gross revenue (AGR) matter, where they were hit by an adverse ruling in October 2019.

- JATIN GROVER

The apex court has held that licence fee paid by telecom operators post July 1999 should be treated as capital expenditure and not as revenue expenditure. They are also likely to seek clarity on whether the applicability of this order will be on retrospective basis (1999 onwards) or on the renewed licence period. A clarity is required here because some analysts feel that since the SC has given a view on the principle behind the taxation, it should apply retrospectively.

According to analysts, the income tax authorities could raise demand for the shortfall in tax payment for the prior period, along with applicable penalties.