No service tax applicable on one-time charges paid for spectrum purchased before April 1, 2016

The central government has clarified that no service tax will be applicable on one-time charges paid for spectrum purchased before April 1, 2016, even if the payment for the spectrum is being made in instalments. Further, the government has exempted service tax on spectrum usage charge and licence fee payable after April 1, 2016, for the year 2015-16. This clarification comes after the government, in the Union Budget 2016-17, announced that assignment of the right to use spectrum and its subsequent transfer will be treated as a service.