Recharge Coupon & Data card

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Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2011 Whether sale of Recharge Coupon attracts Sales Tax/Vat or Service tax

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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18 February 2011 Service tax will be applicable

Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2011 In case of sale of Data card who is liable to pay dealer or Company

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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20 July 2025 Here’s a clear breakdown for your queries on Recharge Coupons and Data Cards:

1. Sale of Recharge Coupon: VAT or Service Tax?
Recharge Coupons are considered a voucher or token which can be redeemed for telecom services.
Service Tax applies on the telecom services provided when the recharge is actually used.
The sale of recharge coupons themselves is generally exempt from VAT or Sales Tax, because they are not goods but vouchers.
However, if VAT is levied, it depends on the state's VAT laws. Many states treat recharge coupons as goods and apply VAT, but generally service tax is the key tax applicable on telecom recharge.
Summary:

Service Tax applies on the service usage, not directly on the coupon sale.
VAT applicability varies by state; often, recharge coupons are exempt or zero-rated.
2. Sale of Data Card: Who is liable to pay tax — Dealer or Company?
Data Cards are physical goods (like USB devices or dongles).
The sale of data cards attracts VAT or Sales Tax as it is a sale of tangible goods.
The dealer selling the data card is liable to pay VAT/Sales Tax to the state government.
The company (telecom operator) is liable to pay Service Tax on the service part (data usage).
Summary:

Dealer: Pays VAT/Sales Tax on sale of the physical data card.
Telecom Company: Pays Service Tax on the data service usage.

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