Can't Levy Tax On Value-Added Services, Mobile Recharges And SIM Cards: Supreme Court

Sales tax cannot be levied on value-added services that include wallpapers, ringtones and music downloads as they do not count as 'goods'.

A bench led by Justice Ravindra Bhatt said no sales tax can be imposed on sharing of infrastructure as the same does not fall under the category of goods.

Source : Getty

Sales tax cannot be levied on SIM cards, value-added services and recharge coupons, Supreme Court ruled on Tuesday. Sales tax cannot be levied on value-added services that include wallpapers, ringtones and music downloads as they do not count as 'goods', says a report by The Economic Times.

Upholding an Andhra Pradesh High Court's 2011 ruling, a bench led by Justice Ravindra Bhatt said no sales tax can be imposed on sharing of infrastructure as the same does not fall under the category of goods, a stand taken by the HC, the report added.

Disposing a batch of over 50 cases on the issue involving various telecom firms including Bharti Airtel, Tata, Vodafone, Idea and BSNL, the apex court rejected the Andhra Pradesh tax department's stand that any intellectual property put in any media would only get classified as 'goods' and never as services.

The department contended that SIM card can store data of phone calls, contact numbers, games, music etc, and is capable of being bought and sold, thus has all the attributes of 'goods', and can be subjected to sale tax, the report mentioned.

Meanwhile, earlier in February, the Department of Telecommunications (DoT) asked sector regulator TRAI to make the quality of service norms stricter in order to curb call drops and improve call quality, an official source said on Tuesday. The move comes after the Department of Telecommunications (DoT) collected feedback from the public through an IVRS call around call drop, quality of calls etc.

"Quality of service is very important for customer satisfaction and protection of their interests. DoT has requested TRAI for improvement in the present quality of service (QoS) through more stringent parameters," an official was quoted as saying by news agency PTI.

The source said that the DoT also observed a few key performance indicators while broadly studying global best practices on QoS.