In Service Tax Appeal No. 13071 of 2013 -CESTAT- Commission received from BSNL on sale & purchase of SIM cards not liable for Service Tax: CESTAT (Ahmedabad)
Members Ramesh Nair (Judicial) & C.L. Mahar (Technical) [21-06-2023]

Read Order: Messrs Hari Om Marketing v. C.C.E. & S.T.-Vadodara-I

Chahat Varma

New Delhi, July 7, 2023: The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal has held that the commission received by M/s. Hari Om Marketing (appellant) from their principal client, M/s. BSNL, in connection with the sale and purchase of SIM cards, would not attract service tax under the category of business auxiliary service.

The issue at hand was whether the commission received by the appellant should be liable for service tax under the head of business auxiliary service

The coram of Ramesh Nair (Judicial) and C.L. Mahar (Technical) remarked that the commission received by the appellant, was already included in the gross sale price of the SIM cards sold to customers. Since the total price of the SIM cards had already incurred service tax, the bench concluded that no separate service tax could be imposed on the commission received by the appellant.

The bench further emphasized that the issue had already been settled in favour of the appellant and was no longer res- integra. Referring to the case of Commissioner of Central Excise v. Chotey Lal Radhey Shyam [LQ/AllHC/2017/2589], the bench highlighted that the Gujarat High Court in the said case, had observed that the purchase and sale of SIM cards belonging to BSNL, where BSNL had already paid service tax on the full value of the cards, did not constitute business auxiliary services and confirmation of demand on the distributors for the second time was not called for.