At the India Mobile Congress (IMC) 2026, held at Yashobhoomi in New Delhi, wireless connectivity pioneer Ceragon (NASDAQ: CRNT) showcased its latest technological advancements aimed at helping telecommunications operators expand network capacity, extend reach, and optimize operational efficiency. The centerpiece of Ceragon’s showcase is the launch of the IP-50EXA-P, a high-power E-band backhaul solution designed to deliver fiber-like capacity over microwave-like distances.
While the technological specifications of the IP-50EXA-P—such as its 27 dBm transmit power, 20 Gbps capacity, and integration with E-stabilizer antennas—are impressive, the commercial rollout of such advanced hardware in India cannot be viewed in a vacuum. For telecom operators and infrastructure providers, deploying these cutting-edge solutions involves navigating a complex web of indirect taxation, customs valuation, and Input Tax Credit (ITC) optimization under the Indian Goods and Services Tax (GST) framework.
The Hardware Import Pipeline: Customs Duties and IGST Challenges
Ceragon’s IP-50EXA-P is slated for commercial release in the first quarter of 2027. When these high-capacity E-band systems are imported into India, they are subjected to rigorous customs and indirect tax assessments. Telecom transmission equipment generally falls under specific Harmonized System of Nomenclature (HSN) codes, which attract Basic Customs Duty (BCD) alongside Integrated Goods and Services Tax (IGST) at the port of entry.
Because the IP-50EXA-P combines advanced hardware with proprietary software elements, determining the correct transaction value for customs purposes is a critical compliance hurdle. Under the Customs Valuation Rules, importers must carefully segregate the value of physical hardware from software licenses that are not condition-of-sale items to avoid overpaying duties. Furthermore, the 18% IGST levied on imports represents a significant upfront cash outflow for telecom companies, making efficient tax planning and swift clearance processes vital to maintaining project timelines.
Unlocking Input Tax Credit (ITC) on Telecom Infrastructure
The financial viability of upgrading to E-band technology relies heavily on an operator’s ability to claim Input Tax Credit on capital goods. Under Section 17(5) of the Central Goods and Services Tax (CGST) Act, blockages on ITC for passive telecommunications infrastructure—specifically telecom towers and pipelines laid outside factory premises—have historically been a point of severe litigation in India.
However, active network components such as Ceragon’s IP-50EXA-P transceivers, the IP-100E (which delivers up to 25 Gbps), and Siklu V-band point-to-multipoint systems are classified as “plant and machinery” rather than civil structures. This classification generally permits telecom operators to claim full ITC on these purchases, significantly reducing the total cost of ownership (TCO). Operators must ensure that their procurement contracts clearly distinguish between active electronic components and passive installation services to prevent tax authorities from disputing ITC eligibility. For companies looking to optimize their capital allocation during large-scale rollouts, understanding the proposed GST refunds on capital goods is essential for preserving liquidity.
Software Licenses, AI Services, and the Reverse Charge Mechanism
Modern telecom networks are increasingly software-driven. Alongside its physical transceivers, Ceragon showcased its AI-powered management platforms, Ceragon Insight and Ceragon IMS, which leverage automation to streamline network operations. This shift from pure hardware to a hybrid hardware-as-a-service (HaaS) and software-as-a-service (SaaS) model introduces distinct GST compliance challenges.
Under Indian GST law, the supply of software licenses and cloud-based network monitoring tools is classified as a supply of services, attracting an 18% GST rate. If these AI-powered management tools are hosted on overseas servers or provided directly by Ceragon’s global entities, Indian telecom operators must account for GST under the Reverse Charge Mechanism (RCM) as an import of services. This requires robust internal audit mechanisms to ensure that RCM liabilities are accurately declared and paid in the month of transaction, allowing the operator to simultaneously claim equivalent ITC in the subsequent filing cycle. Navigating these service-oriented tax structures is becoming increasingly complex as India’s digital economy expands, mirroring broader indirect tax implications for technology-driven services across the subcontinent.
Transfer Pricing and the Risk of Tax Disputes
In its safe harbor disclosures, Ceragon explicitly highlights that “disagreements with tax authorities regarding tax positions that we have taken could result in increased tax liabilities.” For a global entity operating in more than 130 countries, managing transfer pricing and Permanent Establishment (PE) risks in India is a major compliance priority.
When foreign original equipment manufacturers (OEMs) sell high-value telecom equipment to their local Indian subsidiaries or distributors, the transactions must adhere strictly to the arm’s length principle under Indian income tax laws. Discrepancies in transfer pricing methodologies or aggressive tax positioning can attract scrutiny from both direct and indirect tax authorities. As India continues to transition toward a more stringent regulatory environment, proactive tax compliance and clear documentation are the only reliable defenses against prolonged litigation, as outlined in discussions regarding the transition to GST 2.0 and its emphasis on seamless credit flow.
Conclusion: Balancing Innovation with Compliance
Ceragon’s participation at IMC 2026 underscores the rapid pace of wireless backhaul innovation, offering telecom operators the high-capacity E-band tools needed to support India’s growing 5G and broadband networks. However, the successful integration of these technologies depends on more than just spectral efficiency and gigabit throughput. To truly minimize TCO and ensure a seamless rollout, telecom operators and technology providers must work hand-in-hand to address the complex customs duties, ITC structures, and service tax compliance requirements that govern India’s telecom landscape.
Frequently Asked Questions
Ceragon launched the IP-50EXA-P, which is a new high-power E-band wireless connectivity solution.
IMC 2026 took place from October 7 to October 10, 2026, at Yashobhoomi in New Delhi.
The IP-50EXA-P is expected to be commercially available in the first quarter of 2027.
The IP-50EXA-P features transmit power of up to 27 dBm, optional 2- or 3-foot E-stabilizer antennas, up to 20 Gbps capacity in a 2+0 configuration, and support for multiband deployments.
Ceragon showcased Ceragon Insight and Ceragon IMS, which are software tools focused on AI, automation, and end-to-end network visibility.
Ceragon disclosed that disagreements with tax authorities regarding tax positions they have taken could result in increased tax liabilities.
