Exemption notification for selling of sim card/recharge

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nikhil s. pailwan (Querist)
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17 September 2014 My client has business of selling of recharge coupon vouchers is covered under exemption notification 25/2012 but in 2008 he took Service tax registration under Business Auxiliary services and has not filed Service tax returns till date.He has received inquiry regarding service tax registration. My question is from when the selling of sim cards/recharge coupon vouchers are exempt and what is the notification no? and what will be the implications for not filling of returns since 2008?

Annu Agarwal

Annu Agarwal (Expert)
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18 September 2014 Service tax was not leviable on sale of sim cards and recharge coupons even before 01.07.2012.Please refer the following case law:
The Tribunal in the case of Karakkattu
Communications v CCE, Cochin reported
in 2007-TIOL-1374-CESTAT-BANK : 2007 (8) STR 164 (Tri.-Bang.) replying upon its
decision in the case of South East Corporation (Supra) held that purchase of post paid / pre-paid cellular Sim Cards
and selling the same to customer is not covered under Business Auxiliary Service.

Also the Tribunal in the case of RPG Ce
llular Services Ltd. v CCE, Chennai; 2008-
TIOL-642-CESTAT-MAD held that service ta
x cannot be levied on the value of SIM
Card sold by the Appellant and further held that service tax can be levied only on the activation charges. Hence sale and purchase of the SIM card cannot be treated as a taxable service.

I think as the service of selling of sim cards was exempted from that time,you can ask your range officer to waive the penalty for non filling of return.

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