This circular provides clarification on the time of supply for spectrum allocation services provided by the Department of Telecommunications (DoT) to telecom operators under GST, particularly where the operator opts for deferred payment of licence fees.

It explains that the allocation of spectrum by the DoT to telecom operators constitutes a “continuous supply of services” under Section 2(33) of the CGST Act, 2017. When the operator makes payments in instalments as per the Frequency Assignment Letter (FAL), GST is payable on a reverse charge basis by the telecom operator as the recipient of service.

As per Section 31(5)(a), invoices must be issued on or before each due date of payment mentioned in the contract. Therefore, GST liability arises on or before the due date or at the time of payment, whichever is earlier. If full payment is made upfront, GST is payable immediately; if paid in instalments, GST becomes due on each instalment’s due date or payment date.

This principle will also apply to similar allocations of natural resources by the government (e.g., mining rights, spectrum, or land use rights) where payments are made in instalments or upfront, constituting continuous supplies under GST.