Interconnect charges, which include call termination fees, port charges and carriage fees, account for about 30% of the tariff charged to the consumer. Roaming charges make up 10-15% of operators’ earnings.
“A number of telecom service providers had not been deducting the actual quantum of tax that they are supposed to,” Central Board of Direct Taxes member (revenue) Saroj Bala told ET. She declined to identify the companies. The quantum of tax claimed by the authorities is not known.
The income-tax department is of the view that interconnection and roaming charges are in the nature of a fee for technical services, for which tax must be deducted at source at a 10% rate. Interconnection charges apply when voice or data originating in the network of one operator terminates with a user after going through the network of another service provider, or when an independent long-distance operator carries the STD traffic of a telco.