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Tax Department May Impose 18% GST on CXO Salaries, DoT Asks Operators to Pay Up Licence Fee Dues

Professor of Financial Economics and Part-time Value Investor, Transfin.
Nov 14, 2019 12:06 PM 2 min read

Tax department seeks to impose 18% GST on CXO salaries. DoT asks operators to pay up their licence fee dues as per the recent SC AGR ruling.




Tax department might impose 18% tax on CXO salaries.

Money Games: As per this report, some of the top companies headquartered in Pune, Mumbai and New Delhi have started receiving queries from the tax department on cross-charging. The tax department wants companies to proportionately distribute common costs from head office to branch offices and treat this as a supply. Once this is treated as a supply, 10% of it has to be added to the cost and 18% Goods and Services Tax (GST) could be levied on the total amount.


For instance, if the CEO of an organisation earns Rs 5cr per annum, the amount would be considered a cost for the head office where the executive is located. Now the tax department wants the organisation to cross-charge this cost proportionately to other branches and pay 18% GST on it. ET Policy


DoT asks operators to pay up their licence fee dues as per the SC AGR ruling.

No Escape: The Department of Telecommunications (DoT) has issued notices to all operators, including Internet Service Providers and Virtual Network Operators, asking them to do a self-assessment of their respective dues as per the recent Supreme Court ruling on the issue of Adjusted Gross Revenue (AGR) and pay up accordingly.  


Meanwhile, industry experts have opined that the DoT should have calculated the dues owed by various operators instead of asking the telecom companies to do a self-assessment.


The news comes a day after Vodafone Idea CEO said that unless the government eases off on some of the demands on mobile spectrum fees, the company risks liquidation. Hindu BusinessLine


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