The Supreme Court ruled on Tuesday that sim cards, recharge coupon vouchers, and value-added services such as ringtones, wallpapers, and music downloads cannot be subject to sales tax since they are not considered goods. The decision upholds a previous ruling by the Andhra Pradesh High Court in 2011, which stated that sharing infrastructure does not fall under the goods category and therefore cannot be taxed.
Over 50 cases involving various telecom companies, including Airtel, Tata, Idea, BSNL, and Vodafone, were heard together by the Apex Court.
The Supreme Court rejected the Andhra Pradesh tax department’s argument that any intellectual property stored on media would be classified as goods and therefore taxable.
The tax department had argued that since a SIM card can store data such as phone calls, contact numbers, games, and music, it has all the attributes of goods and can be taxed.
However, the Supreme Court bench refused to rely on this argument for the ruling.
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