The Court of Appeals for Customs, Excise and Service Taxes (CESTAT) has ruled that the sale and purchase of SIM cards and recharge coupons does not amount to the provision of business assistance services.
The appellant, M/s JK Enterprises, sells SIM cards, recharge coupons, etc. for mobile phones under a super-distributor agreement with M/s Vodaphone Essar Digilink Ltd. It claims to have provided business assistance services to M/s Vodaphone Essar Digilink Ltd as a franchisee for the sale/distribution and marketing of SIM cards and recharge coupons.
It was therefore proposed that a service tax be demanded and penalties imposed. The cause notice of the show led to ordering issues.
Appellant’s attorney argued that the sale of SIM cards was a transaction, not a service, and therefore did not provide M/s Vodafone with business assistance services.
As the Supreme Court of Idea Mobile Communication Ltd ruled, the authorized representative for revenue upheld the order, holding that SIM cards are a form of service, not a commodity. Therefore, the tribunal correctly held that the appellant was providing business assistance. Service to major M/s Vodafone.
As the revenue case was ruled by the Supreme Court in the Idea Cellular case, the SIM card is not a commodity and its value is not included in the value of the services provided by the carrier, so it is possible to buy and sell SIM cards. about it. It is regarded as business assistance to the person.
The bench, which consists of Judge Dilip Gupta, President and PV Subha Rao, and members (technical), said: In some cases, like in the case of M/s Devangi Communications & Others.
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