Is liable for audit of mobile recharge distributors

Tax queries 3037 views 2 replies

pramodjalandra

Account Administrator

142 Points Posted on 31 July 2014

Respected Members,

I read the previouis topic but some quiery is arise after that so please discuss on.

Eg. A Recharge Distributor (X) purchase recharge voucher through physically or electrically from a Operator the total Value of the Recharge is 100, But Mr. X has paid Rs. 95 (less Rs. 5 commission) inclusive of Service Tax @ 12.36%. And after it Vouchers sell to Retailors at 3% Discount i.e. Rs. 97 (Rs. 100-3%).

And Operator has given to 5% Commission after TDS @ 10% u/s 194H.

Now there are 3 Question arise on this matter this is as follows:

1) First that what is the total Turnover of Mr. X (Distributor) whenever his Net Sale amount is Rs. 97 ?

2) In which category shows this turnover Trading Activity or Serviceing Actvity?

3) Is a liable for Service Tax if Yes then what will be the amount when liable for Service tax?

4) When liable for Maintain Compulsary Books of Accounts & Audit?

Please help on this matter.

Replies (2)

Sahil Chaudhary

Student CA IPC / IPCC

21 Points Posted on 23 June 2015

Respected Members,

some quiery is arise so please discuss on.

Eg. A Recharge Distributor (X) purchase recharge voucher through physically or electrically from a Operator the total Value of the Recharge is 100, But Mr. X has paid Rs. 95 (less Rs. 5 commission) inclusive of Service Tax @ 12.36%. And after it Vouchers sell to Retailors at 3% Discount i.e. Rs. 97 (Rs. 100-3%).

And Operator has given to 5% Commission after TDS @ 10% u/s 194H.

Now there are 3 Question arise on this matter this is as follows:

1) First that what is the total Turnover of Mr. X (Distributor) whenever his Net Sale amount is Rs. 97 ?

2) In which category shows this turnover Trading Activity or Serviceing Actvity?

3) Is a liable for Service Tax if Yes then what will be the amount when liable for Service tax?

4) When liable for Maintain Compulsary Books of Accounts & Audit?

Please help on this matter.

Prasobhkumar R.

Chief Operating Officer

67 Points Posted on 23 June 2015

If there is receipt of commission from the mobile company, normally the turnover will be your commission including TDS.

There is another school of thought that the seller is collecting service tax and price from the end user it should also be treated as turnover.

My opinion is that if there is a commission part, you can take the commission part alone as turnover. If there is profit portion only in any point of sale, the entire amount can be treated as turnover.