Urgent
Querist : Anonymous
In case of a mobile recharge retailer whose anual commission received from mobile company around 15 to 16 lacs. Whether he is liable to obtain service tax registration and pay service tax.
or
He is not liable, as service tax is being paid by principal company (Suppose customer recharged for Rs. 100/- but he gets value of Rs 85 to Rs. 86 after deduction of service tax).
Please clarify.
Querist : Anonymous
What ever a mobile recharge retailer gets from mobile company is difference of Purchase n sale price, not in d mode of commission ( you may confirm it by checking whether TDS is deducted or not). So far as service tax registration matter is concerned , no service tax registration is required ....
Charging Service tax from customer by retailer would lead to levy of service tax twice on same transaction as customer gets balance after deducting of service tax amount from recharge value...
Querist : Anonymous
Querist : Anonymous
One which is being paid by customer
and
Second which will be paid by retailer on his commission.
---
### 1. **Who pays service tax on mobile recharge?**
* The **mobile operator (principal company)** is liable to pay service tax on the recharge amount received from customers.
* The **retailer is not liable to pay service tax on the recharge amount collected from the customer**, because the service tax is already included/deducted by the operator.
---
### 2. **Is retailer liable to register for service tax?**
* The **commission earned by the retailer from the mobile operator** is treated as **"commission income"** under the Service Tax law.
* If the **commission income exceeds the threshold limit for service tax registration (Rs. 10 lakhs per financial year)**, then the retailer **must register for service tax** on the commission received.
---
### 3. **Does retailer have to pay service tax on commission?**
* **Yes**, the retailer has to pay service tax on the commission amount **after crossing the exemption limit**.
* This service tax is on his **commission income**, which is a **separate taxable service**.
---
### 4. **Is there double taxation?**
* The **service tax paid by the operator is on the total recharge amount (Rs. 100)**.
* The **service tax payable by the retailer is on his commission income (say Rs. 14 or 15 per Rs. 100 recharge)**.
* So, **there is no double taxation** because the tax bases are different:
* Operator’s tax = on recharge value (full amount)
* Retailer’s tax = on commission amount (only margin/earnings)
---
### 5. **Can retailer charge service tax from customer?**
* **No**, the retailer should not charge service tax from the customer.
* The customer is paying service tax to the operator already (included in recharge value).
* The retailer’s service tax liability is separate and to be paid by the retailer from his own income (commission).
---
### 6. **About TDS u/s 194H**
* Since the operator is deducting TDS under section 194H on commission, it confirms that the commission is treated as income from commission/agency.
* The retailer should show this commission income in his return and pay service tax accordingly.
---
### **Summary:**
| Aspect | Clarification |
| -------------------------------------------- | -------------------------------------------- |
| Service Tax on Recharge Amount | Paid by mobile operator |
| Service Tax on Retailer’s Commission | Retailer liable if commission > Rs. 10 lakhs |
| Registration for Service Tax | Mandatory if commission exceeds threshold |
| Charging Service Tax to Customer by Retailer | Not allowed |
| Double Taxation | No, different taxable bases |
---
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