Applicability of service tax - installing, repairing - selling of cash cards

[Asked by Guest]

Assessee providing services related to Broadband on behalg of a service provider, like instalation of new connection, repair & maintenance of existing connection, collection on behalf of service provider. Whether the Assessee, getting commission for above services is liable for service tax if yes on what amount. what if taxable services are below Rs. 4 Lakh PA. Assessee is also selling cash card for broadband service like cash card for mobile bill. Is assessee liable for service tax on sale of cash cards. if Yes on what amount service tax has to be paid. Assessee is getting cash card from the company at a discounted rate. The value of cash card also includes service tax.

[Surender Gupta]

All the services mentioned in the query are liable to service tax. In case wehre, turnover is below Rs. 4 Lakh, you can claim exemption. You have to pay service tax on the part of commission

[Madhukar N Hiregange]

Services provided on behalf of another would beliable under Business Auxiliary Service. If the total taxable services provided is below Rs. 4 Lakhs in the previous year, then in the current year till Rs. 4 Lakhs of total receipts there would be no liability. The sale of sim cards could be a service resale. Since Airtel or BSNL would have already paid the ST on the SIM card on the whole value there would be no requirement for the reseller to charge.

AI Summary

Service tax liability: commission-based installation, repair and collection services attract tax; resale of cash cards may be exempt.
Installation, repair, maintenance and collection services performed for a service provider are taxable as business auxiliary services, and service tax is payable on the commission or receipts of the intermediary. An exemption applies where total taxable services in the prior year fall below the exemption threshold. The resale of cash cards or SIM cards may be treated as resale for which the principal has already paid service tax, so the reseller may not be required to charge service tax separately, although the instrument's value may include service tax.