Sale of sim card by retailer

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2011 Whether dealer/retailer of SIM Card is liable to Register under Service Tax, if his turnover (including sale of SIM Card and Sale of Recharge Coupon) exceeds Rs.10 Lakh. If yes then under which category.

I have case where retailer of UNINOR SIM Card is Purchasing SIM card from company for eg. at Rs.90 and selling SIM card to the end customers for eg. at 90/100/80, it may be any price depending on schemes.

Further whether retailer is liable to charge service tax on recharge coupon/E-Recharge.

As we all know end customer is paying service tax on its purchase of SIM Card or recharge, and company i.e. UNINOR in this case is also paying service tax to the department, so whether Dealer/Retailer is liable for service tax.

Thanks in advance.

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)
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11 September 2011 As per My Opinion No Service tax shall be levied on such dealer.

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Please Refer for text of Judgement: https://logisticscommercialcareer.wordpress.com/2011/08/18/sim-cards-liable-for-service-tax-not-vat-sc/

As per Para 3 of above said judgement

"The issue which arises for our consideration in this appeal is whether the value of SIM cards sold by the appellant herein to their mobile subscribers is to be included in taxable service under Section 65 (105) zzzx of the Finance Act, 1994, which provides for levy of service tax on telecommunication service OR whether it is taxable as sale of goods under the Sales Tax Act."

It must be noted that said case has been decided in light of Section 65 (105) zzzx of the Finance Act, 1994, which provides for levy of service tax on telecommunication service.

In Event of any taxability to arise , the same must be covered in the ambit of telecommunication service.

Since "telegraph authority" covers under "tele communication" service, telegraph authority means- ‘Telegraph authority’ has the meaning assigned to it in section 3(6) of Indian Telegraphs Act, 1885 and includes a person who has been granted a licence under the first proviso to section 4(1) of that Act [Section 65(111)].(as you mentioned)

The Dealers are not covered above and shall not be liable to ST.

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Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2011 Thanks Ankit, But under which category he should get register under service tax,i mean under which category i.e. Tele Communication Service, Business Auxiliary Service or any other please suggest me.

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)
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11 September 2011 Find my Consolidated reply above.

Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2011 same thing i was thinking but when i refer to act then i come to know - only "telegraph authority" covers under "tele communication" servic, telegraph authority means- ‘Telegraph authority’ has the meaning assigned to it in section 3(6) of Indian Telegraphs Act, 1885 and includes a person who has been granted a licence under the first proviso to section 4(1) of that Act [Section 65(111)].

Is there any other solution ?

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)
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11 September 2011 Find my Consolidated reply above.

Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2011 but that is the case of company who provides the actual service and not dealers or retailers.