2015 (9) TMI 1221 - AT - Service Tax

Commission agent / distributor of BSNL sim cards - Receipt of commission - business of marketing and selling of Pre-paid and Post-paid mobile connections, Pre-paid Recharge vouchers - Held that - Issue involved in this case is now squarely settled by the judgment of the Tribunal in the case of G.R. Movers 2013 (6) TMI 339 - CESTAT NEW DELHI , wherein identical issue was considered. Aggrieved by such an order of the Tribunal, Revenue preferred an appeal before the Hon ble High Court of Allahabad and their Lordships dismissed the appeal filed by the Revenue which is reported at 2013 (11) TMI 1558 - ALLAHABAD HIGH COURT - Demand of service tax set aside - Decided against Revenue.

Summary

Issues Involved:
Service tax liability under the category of telephone services.

Analysis:
The appeals revolve around the service tax liability concerning telephone services. The respondent, engaged in marketing and selling mobile connections and recharge vouchers, did not recover service tax on commission from M/s. BSNL. The adjudicating authority upheld the demand, but the first appellate authority set aside the Orders-in-Original, prompting the Revenue to appeal. The Tribunal referred to the settled issue in the case of G.R. Movers, where it was established that once service tax liability on the full value of the SIM card is discharged by BSNL, there should be no further demand on the distributor. This principle was reinforced by the Hon'ble High Court of Allahabad in subsequent appeals. Consequently, the Tribunal found no merit in the Revenue's appeals, affirming the correctness and legality of the impugned orders. As a result, the appeals were rejected.

This judgment clarifies the service tax liability in the context of telephone services, emphasizing the distributor's obligation once BSNL has discharged the service tax on the full value of the SIM card. The decision is based on precedents set by the Tribunal and upheld by the Hon'ble High Court of Allahabad, establishing a clear legal position on the issue. The Tribunal's ruling ensures consistency and adherence to established legal principles, providing clarity for future cases involving similar service tax liabilities in the telephone services sector.