COVER IN SERVICE

This query is : Resolved

HARISH (Querist)
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08 April 2011 Dear Sir
I am Distributor ITZ cash Ltd and i am getting Rs.400 commission after sale of Rs.10000/- value. this is itz card and it is use for railway, air ticket, mobile recharge,& dth recharge.
am i cover in service tax, if yes then in which service i am covering.

HARISH

HARISH (Querist)
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15 April 2011 Dear Experts

pls reply, it urgent

Harish

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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20 July 2024 As an ITZ cash card distributor earning commission on sales, you are providing a service related to facilitating transactions through the ITZ cash card platform. Let's break down the potential implications for Service Tax (now GST):

1. **Nature of Service Provided:**
- You are facilitating transactions through the ITZ cash card, which is used for various purposes like railway tickets, air tickets, mobile recharge, and DTH recharge.
- Your role involves selling and promoting these cash cards, thereby enabling customers to use them for payments and recharge services.

2. **Service Tax Liability (now GST):**
- Under the previous Service Tax regime and now under GST (Goods and Services Tax), the service of distribution and facilitation of prepaid payment instruments (PPIs) like the ITZ cash card falls under the category of "Business Auxiliary Services" or "Support Services."
- Specifically, this could fall under the category of "Business Support Service" or "Facilitation Service" as defined under Service Tax laws.

3. **Threshold for Service Tax Liability:**
- In the past, Service Tax was applicable if your aggregate turnover exceeded the prescribed threshold limit (which varied over time).
- Under GST, if your turnover exceeds Rs. 20 lakhs (Rs. 10 lakhs for special category states), you are liable to register and pay GST.

4. **Registration and Compliance:**
- If you are liable for Service Tax or GST, you need to register with the tax authorities, collect tax from customers (if applicable), and file regular returns as per the GST regulations.

5. **Conclusion:**
- Based on the information provided, as a distributor earning commission on the sale of ITZ cash cards used for various transactions, you are likely involved in a service that attracts Service Tax (now GST).
- It falls under the category of facilitating payments and recharge services through prepaid instruments, which historically has been covered under Service Tax laws and now under GST.

**Note:** The exact applicability of GST and specific compliance requirements may vary based on your turnover, location, and other factors. It is advisable to consult with a tax professional or GST consultant to understand your specific tax obligations and ensure compliance with the current GST regulations.

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