Service Tax - No Idea!
THE Idea did not click with Supreme Court. Idea Mobile Communications was in the Supreme Court in appeal against an order of the Kerala High Court that sale of SIM cards is a taxable service. The Supreme Court held, “SIM Cards are never sold as goods independent from services provided. They are considered part and parcel of the services provided and the dominant position of the transaction is to provide services and not to sell the material i.e. SIM Cards, which on its own but without the service, would hardly have any value at all. Thus, the value of SIM cards forms part of the activation charges as no activation is possible without a valid functioning of SIM card and the value of the taxable service is calculated on the gross total amount received by the operator from the subscribers. The Sales Tax authority understood the aforesaid position that no element of sale is involved in the transaction”.
The Supreme Court delivered this judgement yesterday and we bring it to you today. Please see Breaking News.