2017 (1) TMI 763 - AT - Service Tax

Business Auxiliary Service - commission received from BSNL for selling of SIM cards - whether the commission will be included in assessable value? - Held that - the price at which the ultimate customer purchases the SIM Card is ₹ 331/- and admitted that BSNL pays ₹ 31 as Service Tax on the same - Revenue further contended that the respondent receiving SIM Card at ₹ 316/-which is ₹ 285 Rs.31 service tax paid and balance amount of ₹ 15 is retained by the respondent as commission - this clearly means that for ₹ 31 service tax, assessable value is ₹ 300/- which is inclusively ₹ 285/- paid to BSNL and ₹ 15 retained by the respondent - the commission received by the respondent is already subjected to Service Tax at the hands of BSNL - appeal rejected - decided against appellant-Revenue.

Summary

Issues: Assessment of service tax on commission received by the respondent for selling SIM cards.

Analysis:
The case involved an appeal filed by the Revenue against an Order-in-Appeal passed by the Commissioner (Appeals) regarding the assessment of service tax on the commission received by the respondent for selling SIM cards. The Revenue contended that the commission received should be considered as assessable value for service tax purposes. The Original Authority had upheld the demand for service tax, interest, and penalty, which was later appealed by the respondent. The Commissioner (Appeals) examined the breakup of the value of the SIM cards sold and concluded that the commission received by the respondent was already part of the assessable value, hence dropping the proceedings and allowing the appeal.

In the appeal before the Tribunal, the Revenue maintained that the commission received by the respondent should be subjected to service tax. The respondent, on the other hand, argued that the commission was already included in the assessable value on which BSNL had paid service tax. The Tribunal considered the contentions of both parties and analyzed the pricing structure. It was found that the service tax paid by BSNL was inclusive of the commission received by the respondent. Therefore, the commission had already been subjected to service tax at the hands of BSNL. Consequently, the Tribunal dismissed the appeal filed by the Revenue and disposed of the cross-objection raised by the respondent.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) by determining that the commission received by the respondent for selling SIM cards had already been included in the assessable value for service tax purposes, as the service tax paid by BSNL covered the commission amount. Therefore, the appeal by the Revenue was dismissed, and the cross-objection by the respondent was also disposed of.