Service tax on mobile recharge distributor

The distributor of SIM Card  does not provide any service to the customer rather he provides service to  the Cellular / Mobile  Company. Distributor is liable to pay service tax only on the consideration he receives from the cellular companies in the form of or by way of commission from sale of SIM Card or recharge of coupons sold to the customers.

For example if a Customer purchases a SIM Card of Rs. 500 from a Distributor it means the Customer is entering into an agreement with the Cellular Operator to provide a service and not with the distributor or seller of SIM Card . Here Cellular Company is liable to pay the Service Tax on Rs. 500 received by the distributor from the Custom on his behalf,  If the Distributor pays only Rs. 490 to the cellular company after deducting Rs. 10 from  the gross amount of Rs. 500 collected by him from the customer then he is liable to pay Service tax on Rs. 10 . Alternatively , the entire amount of Rs. 500 collected by the distributor is paid to the cellular company and the cellular company pays the commission of Rs. 10 to the Distributor separately then on such amount service tax need to be paid by the Distributor. 

Thanks for the reply. But there are two points of consideration:

First, will the distributor be eligible to claim basic exemption of Rs. 10 Lakhs?

Second, what about the 29(f) point of mega exemption notification (No. 25/2012)?

Hope to receive your high valuable inputs.

Entry No 29(f) of Mega Exemption Notification 25/2012 refers to the amount of Rs. 500 received from the Customers. No service tax need to be paid by the Distributor on the Gross amount of Rs. 500 collected from the customers as the same is collected on behalf of the Cellulor Operator and covered under the entry No 29(f). However, Distributor need to pay services tax on the amount earned by way of commission from sale of such Sim Card or recharge Coupon . Quite obvious that he can avail the benefit of threshhold exemption.