CESTAT Chandigarh: SIM Card Sale Not Business Auxiliary Service

The Appellate Tribunal CESTAT Chandigarh allowed the appeal against the demand of Service Tax for the sale and purchase of SIM Cards of BSNL under 'Business Auxiliary Services'. Citing previous decisions and the Supreme Court judgment in Idea Mobile Communication Ltd., the Tribunal held that the sale and purchase of SIM cards, where BSNL had already paid service tax on the full value, does not constitute business auxiliary services. The impugned order was set aside, and the appeal was allowed with consequential relief for the appellants.

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Issues:
Appeal against demand of Service Tax under 'Business Auxiliary Services' for sale and purchase of SIM Cards of BSNL.

Analysis:
The judgment by the Appellate Tribunal CESTAT Chandigarh involved an appeal against the demand of Service Tax under the category of 'Business Auxiliary Services' for the sale and purchase of SIM Cards of BSNL. The Tribunal considered the fact that the issue had been previously decided in the appellants' own case in a Final Order dated 14.07.2016. Referring to the Supreme Court judgment in the case of Idea Mobile Communication Ltd., the Tribunal emphasized that the value of SIM Cards does not need to form part of the activation charges. The Tribunal also mentioned a case involving Martend Food & Dehydrates Pvt. Ltd., where it was held that the activity of purchase and sale of SIM cards belonging to BSNL, where BSNL had already discharged the service tax on the full value of the SIM Cards, does not amount to providing business auxiliary services. Consequently, the Tribunal set aside the impugned order and allowed the appeal with consequential relief for the appellants.

The Tribunal reiterated that since the issue had already been settled in favor of the appellants, the activity of sale and purchase of SIM Cards on behalf of BSNL, along with the commission received, is not chargeable under the category of Business Auxiliary Services. Therefore, the impugned order was set aside, and the appeals were allowed with any consequential relief deemed necessary. The judgment concluded with the order being dictated and pronounced in the court by the concerned authority.

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