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Others 901 views 4 replies

 

Dear professional colleague,
 
please render your valued opinion on following issues:


An assessee engaged as DSA for sale and activation of Post Paid Connection/Pre Paid Connection and selling of Sim Cards of Pre paid Connection and Recharge/E TOP UP coupons.

 

Billing Pattern of AIRCEL to DSA FOR PREPAID SIM CARD

 

Cost of Prepaid Sim -        25 Nos.    

    316.50

Add: Service Tax                             56.68

     EC  2%                                   1.13

     SHE 1%                                   0.57

     Rounding off                             0.12

                     

     TOTAL                                 375.00              

 

MRP printed on the SIM Card is as follows

 

Processing Fees                            22.67

Service Tax and EC                          2.33

MRP                                        25.00

 

In the above bill ST is charged on MRP value i.e. 25 NOs. * 22.67 *10% = 56.68

 

 

 

       Query 1 (Prepaid Connections)

 

        DSA sold SIM @ 15/- per card.

 

  1. Whether distributor is liable to charge service tax @ 10.30% on Rs. 15/-  i.e.  1.40  and claimed Rs. 58.38 as Input

         

                              Or

 

     Distributor has nothing to do with Service Tax as service
     tax is not attracted as ithas already been charged by
     AIRCEL on MRP at first point at the billing.

 

  1. Whether VAT is chargeable on sale of SIM Card of prepaid Connection or it is out of scope of VAT and covered in service tax only.

 

     Query 2 (Post Paid Connections)

 

     3. In “POST PAID CONNECTIONS” Distributor used to get              various type of commission and reimbursement of some
         establishment cost on which service tax
         is being charged @ 10.30% on Commission bills and
         reimbursement of expenses since inception without
         claiming the threshold limit of  Rs. 10 lac.

 

        In my understanding an assessee assumption for not
        claiming threshold limit is correct  since this limit
        would not be available to assesses as he is dealing in
        Branded goods (AIRCEL). 

 

        Please correct my views.

Replies (4)

dealer is neither service provider nor the owner of services, its just a franchise so he does not need to account for service tax /vat

commission received on account of such transactions are liable to service tax.

Thanks sir

but in my case service tax first paid by DSA, and after reimbursed by company 

ie: suppose 100000 ST paid by DSA  by his name (under DSA  ST no.) and after company paid to DSA rs.100000

then DSA also liable to file service tax return 

your interpretation is wrong

at the time of release of sim cards company has paid service tax + vat , and then onlly the sim cards are sent to DSA, how DSA can charge the same at 1st point?

if DSA is likely to file returns and pay service tax , then they have to take credit of service tax paid by company 1st then charge service tax to next customer, 

as the service is not provided by DSA, so they are not provider of service , hence no threshold exemption available to them. 

but the commission income/ service is provided by the DSA, and this area is available for claiming threshold limit of 10L

Thanks a lot sir


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