Bombay
HC upholds recovery of Local Body Tax (‘LBT’) on SIM cards and recharge
coupons / vouchers brought into municipal limits by telecom service provider,
u/s 127(2)(aaa) r/w Section 152-P of Maharashtra Municipal Corporations Act,
1949 (‘Act’); Rejects assessee’s reliance on SC rulings in BSNL and Idea
Mobile Communication Ltd. to contend that SIM cards and recharge coupons are
not goods, with no intrinsic value at all and incapable of being used
independent of cell phone; Perusing the relevant provisions of said Act, HC
observes that concepts of Sales Tax and LBT are not same, “LBT can be levied
on the goods brought within the limits of a Municipal Corporation even if the
same are not sold, but the same are brought either for consumption or use.”
States that SIM cards and recharge vouchers are tangible goods capable of
being transferred, stored, possessed, and used after being brought into
limits of city and hence, will be “goods” within the meaning of Section 2(25)
of said Act; While Apex Court in Idea Mobile Communication Ltd had come to
the conclusion that no sales tax is payable as SIM cards have no intrinsic
value, it had not considered whether they are capable of being used which is
relevant consideration for charging LBT, observes HC; However, HC remarks
that e-recharges, which are nothing but electronic downloads, can by no
stretch of imagination be said to be capable of being brought into limits of
a city and are not covered by Item No. 133 of Govt. Notification dated March
28, 2013; In view thereof, observes, “E-recharge is capable of being used.
But it cannot be said that by downloading erecharge through internet, e-recharge
is brought into limits of a Municipal Corporation. Hence, LBT cannot be
recovered on erecharge.” : Bombay HC
The judgment was delivered by Justice A. S. Oka and Justice
Vibha Kankanwadi.
Mr. Surel S. Shah alongwith Mr. Amitt Khairnar , Mr. Amit
Dande and Mr. Taufia Kapadia appeared on behalf of the assessee, while
Revenue was represented by Mr. N. R. Bubna and Mr. A. A. Alaspurkar.
Detailed summary will be uploaded on the portal shortly.
[TS-286-HC-2017(BOM)-VAT] Click here to read and download Judgment copy. Click here to post your comment. For subscriptions, please contact: sales@taxsutra.com |
Wednesday 4 October 2017
SIM cards & recharge vouchers constitute 'goods' for LBT, but e-recharges outside ambit
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