No Separate Service Tax on Commission Received from BSNL When Assessee Included it in Gross Sale Price of SIM Card Sold Customers: CESTAT [Read Order]

The Ahmedabad bench Customs, Excise and Service Tax Appellate Tribunal (CESTAT) have held that no separate service tax demandable on commission was received from BSNL when the assessee included it in the gross sale price of sim card sold to customers.

The question before the Tribunal that whether the commission received by the appellant, Messrs Hari Om Marketing from their principal client M/s. BSNL in connection with the sale and purchase of SIM cards is liable to service tax under the head of the business auxiliary service.

Shri Amal Dave, Counsel appeared on behalf of the appellant and Shri Ajay Kumar Samota, Superintendent (AR) appeared on behalf of the Revenue to reiterate the finding of the impugned order.

It was found that the commission received by the appellant since included in the gross sale price of the SIM card sold to the customers and the total price of the SIM card suffered service tax, no separate service tax can be demanded on the commission received by the appellant.

The Apex Court in the case of Martend Food & Dehydrates Pvt. Ltd. held that the activity of purchase and sale of SIM Card belonging to BSNL where BSNL has discharged the service tax on the full value of the SIM cards does not amount to providing Business Auxiliary Service.

In light of the Judicial decision, the two-member bench comprising Mr Ramesh Nair, Judicial Member and Mr C L Mahar, Technical Member set aside the impugned order and allowed the appeal.

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