TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Appeal allowed as no further tax can be collected from intermediaries. Previous rulings upheld, demand dismissed.</h1> <h3>JR COMMUNICATIONS & POWER CONTROLS Versus CCE, TRICHY</h3> The appeal was allowed based on the principle that once sales tax is paid on goods, no further tax should be collected from intermediaries. The decision ... Sale of sim cards and recharge coupons as a franchisee of BSNL - Once BSNL had opted to discharge sales tax on transfer of ownership of sim cards and recharge coupons to customers; there was no need to pay any service tax in relation to the same transaction. As regards sale of cards, BSNL discharges the sales tax on their face value charged from its customers – JRC (appellant) gets discount on sale price from BSNL, should not attract service tax Issues:Demand of service tax under Business Auxiliary Services (BAS) and Repair and Maintenance Service.Analysis:The impugned order affirmed the demand of service tax from the appellants under the head BAS and Repair and Maintenance Service. The appeal challenges the demand of service tax under the head BAS and education cess. The appellants, engaged in the sale of sim cards and recharge coupons as a franchisee of BSNL, were allowed a discount on BSNL's sale price of sim cards and recharge coupons. The lower authorities treated this discount as commission received by the appellants, leading to the raised demand. Penalties were imposed under various sections of the Finance Act, 1994.Reiterating the plea, the Ld. Counsel argued that once BSNL pays sales tax on the value of sim cards and recharge coupons sold to customers, no further liability should exist regarding any associated services. The appellants could only be charged for BAS if they were involved in promoting the sale or service of BSNL. The transactions between BSNL and the appellants were on a principal-to-principal basis, and since BSNL discharged sales tax on the face value of the cards, the discount received by the appellants should not attract sales or service tax.The Tribunal's decision in a similar case was cited by the Ld. Counsel to support their argument, where the demand of service tax under BAS was set aside for an intermediary receiving a discount treated as commission. The Ld. SDR, however, reiterated the reasoning and findings of the impugned order.After considering the case records and submissions, it was established that the payment of sales tax by BSNL on sim cards and recharge coupons fully discharged the tax liability on the transaction. Therefore, no further tax should be collected from an intermediary like the appellants for transactions involving the same goods. Citing previous Tribunal decisions, the Member (Technical) allowed the appeal, as the appellants were not promoting the business of BSNL and the sales tax liability was already discharged by BSNL. The decision was in line with previous rulings, and the appeal was allowed.In conclusion, the appeal was allowed based on the principle that once sales tax is paid on goods, no further tax should be collected from intermediaries. The decision aligned with previous Tribunal rulings and was not contested by the revenue, leading to the dismissal of the demand of service tax under BAS and Repair and Maintenance Service.
TaxTMI 
TaxTMI 
