Service tax on mobile recharge

This query is : Open

suraj (Querist)
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16 October 2008 Hi,

Whether service tax is chargeable on the sale of Recharge Coupons. Acutally the coupons are purchase at a discount and sold to the retailers.

Thanks

Guest

Guest (Expert)

16 October 2008 (My Opinion)Service tax is not applicable on sale of recharge coupons. service tax is always chareable on taxabale services (Prescribed in Service Tax Rules) so there is no service prescribed for sale of coupons of mobile so no liability of service tax

suraj

suraj (Querist)
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16 October 2008 Thanks a lot.
As the company who sells this coupons get a commission in the form of discount on sale of coupons. Whether the commission does not comes into any of the taxable service?

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Taxguy

Taxguy (Expert)
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16 October 2008 It is sale and not service. There is s Apex court decision on this issue.

CA V. Mohanakrishnan

CA V. Mohanakrishnan (Expert)
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17 October 2008 I think the apex court decision was with respect to SIM cards and not on recharge coupons.

Service tax is applicable on recharge coupons as the sale is of the airtime and not of any other product. Furter, the practice of recharge coupons has come down, giving way to e-recharge with values being store and transferring through to buying parties through mobile.

mr.suraj when you are talking about discount i think you must be specifying the schemes which is being offered by the telecom companies as 10+2 or 10+3 which means for each 10 coupons value purchase 2 or 3 is being free to the distributor.

suraj

suraj (Querist)
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19 October 2008 Mr. Mohankrishnan can u give me personal id so that i can mail the complete details...

suraj

suraj (Querist)
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23 October 2008 k