Taxability of handset supplied in telecom package upheld as part of sale, with no substantial question of law arising.

A handset supplied under a telecom package was treated as part of a taxable sale because it was provided for consideration, had market value, and was intended to pass to the subscriber rather than being a free or incidental item. The treatment of substituted SIM cards was also upheld where extra charge was collected. Authorities dealing with SIM cards as part of service and with unserviceable goods were distinguished on the facts. On this reasoning, no substantial question of law arose for interference under section 53(2) of the Madhya Pradesh Value Added Tax Act, 2002.

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Issues: Whether the handset supplied to subscribers under the telecom package and the substituted SIM cards supplied on payment of charges were exigible to commercial tax, and whether any substantial question of law arose under section 53(2) of the Madhya Pradesh Value Added Tax Act, 2002.

Analysis: The service could not be rendered without supplying a handset to the subscriber, and the facts showed that the handset was supplied as part of the package for consideration, not as a free or merely incidental item. The handset had market value and was intended to pass to the customer as part of the deal, which brought it within the notion of sale. The reliance placed on authorities dealing with SIM cards forming part of service was distinguished, because the present dispute concerned a handset, and the authorities had separately taxed only substituted SIM cards on which extra charge was collected. The cited decision concerning unserviceable goods was also found inapplicable. On these facts, no substantial question of law arose for interference in appeal.

Conclusion: The handset was liable to commercial tax as part of the taxable transaction, and the levy on substituted SIM cards was not displaced. The appeals were liable to dismissal.

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