SERVICE TAX ON INTERCONNECTION USAGE CHARGES

Central Board of Excise & Customs (CBEC) has clarified that Interconnect Usage Charges (IUC) charged by one telecom operator to another telecom operator for providing interconnection facility are not chargeable to service tax under the under the head ‘Telephone Services’ in view of the fact that latter is not a subscriber for the former. But now, such charges shall be chargeable to service tax under the new head ‘Tele-communication Services’ from the notified date after the enactment of Finance Bill, 2007. (CIR No. 91/2/2007-ST, Dt. 12-03-07)