SC upholds CESTAT ruling, rejects ₹244-cr service tax and penalty demand on Airtel

New Delhi: The Supreme Court on Monday dismissed the Central Goods and Services Tax department's appeal to levy service tax of ₹119 crore plus penalty of ₹125 crore on Bharti Airtel on the call free allowance waiver given by the telecom company to its employees.

A bench led by Justice JB Pardiwala upheld the January order of the Chandigarh bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) that quashed the department's demand including penalty against Bharti Airtel. The company, under its 'Airtel Employees Services Scheme', was granting waiver on telephone charges up to the call free allowance limit for mobile phones and fixed line connections. The waiver was only for Bharti Airtel employees and not for their relatives or employees of other group companies.