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SIM CARDS AND RECHARGE COUPONS

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Tax Payer (Querist)

09 May 2011 I am dealer in Sim Cards and Recharge Coupons for a particular area of TATA Docomo. The Telecompany while billing of SIM Cards, they charge Sales Tax and for Recharge Coupons, they charge Service Tax. My doubt is whether I should also collect Sales Tax i.e., VAT on sale of SIM Cards and Service Tax on sale of Recharge Coupons. My auditor advised me not to collect any tax on sale of SIM or Recharge Coupons. Could anyone help me in this regard?

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)

09 May 2011 If you are registered under the VAT Act of concerned State, then you should collect VAT on the sale of sim-cards. Because, SIM card is a VATable goods as per the Law. In case of recharge, you need not collect service tax as the services are given by the company and not by you. So collect VAT on SIM card and dont collect service tax on recharge coupons or vouchers.

Tax Payer

Tax Payer (Querist)

09 May 2011 Thank you sir....

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