Tax uncertainty

SC ruling will increase uncertainty in telecom

A recent ruling by the Supreme Court (SC) that licence fees paid by telecommunication companies after July 1999 should be treated as capital expenditure and not revenue expenditure could pose a challenge for a sector that has faced significant financial stress already. The apex court’s verdict set aside the earlier judgments by the Delhi High Court, Bombay High Court, and Karnataka High Court, which had all gone in favour of the telcos. Over the years, there have been several twists and turns around how licence fees must be paid and under which head they should be clubbed, resulting in policy