Order Date – 10 October 2023

Parties: M/s. Vodafone Idea Ltd. Vs Commissioner of GST & Central Excise

Facts –

• The Appellant, M/s. Vodafone Idea Ltd. tied up with foreign mobile operators for international outbound roaming. The foreign mobile operators charges the appellant for the said service and in turn the appellant charged their customers for the said services.
• A Show Cause Notice was issued to the appellant proposing to demand service tax with interest and for imposition of penalty alleging that international outbound roaming services which appeared to be taxable under ‘Business Auxiliary Service’ (BAS).
• The adjudicating authority confirmed the allegations in the Show Cause Notice.

Issue –

• Whether the international outbound roaming services are taxable under BAS?

Order –

• The Tribunal observed that the majority order makes it clear that in the case of international inbound roaming the FTO is the person who is legally entitled to receive the service of the HNO as per the agreement, even though the beneficiary is the customer/ subscriber of FTO in the taxable territory. Hence it was held that during international outbound roaming outside the taxable territory the HNO is the service recipient of the services provided by the FTO and not the HNO’s subscribers/ customers.
• The activity of providing cellular / mobile connectivity from outside the country to a subscriber of a HNO during ‘international outbound roaming’, relates to ‘telecommunication service’.
• Although the activity of providing cellular / mobile services to a subscriber during ‘international outbound roaming’ relates to telecommunication service, however the said services provided by any person who is not a ‘telegraph authority’, as in the present case, the activity would not be a taxable service as defined by section 65(109a) and is hence not exigible to service tax at the hands of the appellant under RCM.
• The appeal succeeds and is disposed of accordingly.