TaxTMI 
TaxTMI 
A dealer is in business of slae/purchase of cellular phones, rechage coupns etc.whether the dealer should declare the sale of rechage coupn as exempt sale in its vat return. It is wirthwhile to note that rechage coupn is not subject to sales tax as no sale, but transfer of services only.
gross turnover
14 Jun 2011 
4 Replies 
1567 Views Asked by
Taxability of recharge coupons: dispute over VAT treatment with authorities and tribunals reaching conflicting conclusions.
Whether sale of prepaid recharge coupons by a dealer is subject to VAT is contested: one view treats wholesale purchase and retail resale by a dealer as a taxable sale, while an alternative view treats coupons as advance receipts for telecom services or actionable claims not liable to VAT. Tribunal decisions and administrative positions conflict, with reported rulings both endorsing VAT chargeability and supporting exemption; dealers should check local rulings and seek advice when declaring recharge-coupon transactions in VAT returns. (AI Summary)
Whether sale of prepaid recharge coupons by a dealer is subject to VAT is contested: one view treats wholesale purchase and retail resale by a dealer as a taxable sale, while an alternative view treats coupons as advance receipts for telecom services or actionable claims not liable to VAT. Tribunal decisions and administrative positions conflict, with reported rulings both endorsing VAT chargeability and supporting exemption; dealers should check local rulings and seek advice when declaring recharge-coupon transactions in VAT returns. (AI Summary)