Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: TDS :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: VAT Audit :: cpt :: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: VAT RATES :: empanelment
 
 
Service Tax »
 GST: Centre, states to divide taxpayer base
 A 5-Point Guide For Buyers To Understand The Effect Of GST On Real Estate
 Stalled unsorted diamond imports to resume after GST rate revision
 TDS, TCS deductors can apply for GST registration from 18 September
 E-commerce companies face tax heat as I-T department says discounts should be treated as capital spend
 Central Goods and Services Tax (Sixth Amendment) Rules, 2017
 GST will also impact direct tax collection
 Seeks to extend time period for filing of details in FORM GSTR-6 for months of July & August
 GST: Is input tax credit available for tax paid on mobiles given to staff?
 GST filing, reconciliation solution launched
  Finance Ministry asks taxmen to submit note on high-pitched assessments

SC: Telecom firms will pay service tax on sale of SIM cards
August, 08th 2011

The Supreme Court has held that telecom operators will have to pay service tax on the sale of SIM cards as these transactions entail their processing and activation for providing cellphone services.

Upholding the judgement of the Kerala high court, a bench of justices Mukundakam Sharma and A R Dave said the sale of SIM cards was part of the activation and processing fee, on which the telecom firms pay service tax.

"The position in law is clear that the amount received by the cellular telephone company from its subscribers towards SIM card will form part of the taxable value for levy of service tax," said the bench.

It observed that payments made by subscribers to procure SIM cards are generally processing charges for activating cellphone services and consequently it would necessarily be included in the value of the SIM Card.

"Thus, it is established from the records and facts of this case that the value of SIM cards forms part of the activation charges, as no activation is possible without a valid functioning of SIM card and the value of the taxable service is calculated on the gross total amount received by the operator from the subscribers," the bench said.

The apex court's direction came over a petition of Idea Cellular, which had challenged directions of the Excise department to pay service tax on the sale of SIM cards.

"We find no infirmity with the findings and reasoning in the judgement and order passed by the high court and therefore the appeal has no merit and the same is dismissed," said the bench while dismissing the petition of Idea Cellular.

The Idea Cellular was selling subscriber identification module (SIM) cards and was paying sales tax to the Kerala government on that.

The state's department of Sales Tax was charging sales tax under Kerala General Sales Tax Act, 1963 on the grounds that activation is nothing but a value addition and thus comes under their domain.

However, it was objected to by the department of central excise, Eranakulum (Service Tax Department), observing that a mere SIM card without activation is of no use and imposed service tax along with penalty on Idea Cellular.

The excise department contended that SIM Card has no intrinsic sale value and it is supplied to customers to provide telephone service. It also said that selling of the SIM card and its process of activation are "services" provided by the mobile cellular telephone companies to the subscriber.

This was challenged by the company before the Customs Excise and Service Tax Appellate Tribunal in 2003, which on its order dated May 20, 2006 held that service tax can not be levied on sale of Sim cards.

Following it, the Central Excise, Eranakulum moved the High Court, which on September 4, 2008 allowed their plea and upheld their stand on SIM cards.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
E-catalogue online catalogue E-brochure online brochure online product catalogue online product catalogue e-catalogue Indi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions