Tax treatment of telecom license fees

The podcast episode discusses the 20-year-long court battle over the tax treatment of telecom license fees in India. Initially, telecom companies were required to pay a fixed license fee to the government each year, which became burdensome for many companies. In 1999, the government revised the telecom policy and changed the license fee to be linked to the annual revenue of the telcos. The main question in the court battle was whether the license fee should be considered a revenue expense or a capital expense. After going through various courts, the Supreme Court ruled that the annual license fee should be treated as a capital asset, affirming the stance of the tax authorities.