Supply of SIM Card is not supply of goods but is service :
SIM card is a card containing computer chips with pre-recorded instructions which would, upon activation, enable the customer access to the service of cellular phone.
In Idea Mobile Communication Ltd. v. CCE &C [2011] 32 STT 262 = 12 307 = 43 VST 1 (SC), it has been held that SIM card does not have any intrinsic value. The value of SIM card forms part of the activation charges as no activation is possible without a valid functioning of SIM card. Thus it is ‘service’ and not ‘goods’ – followed in State of Andhra Pradesh v. Bharat Sanchar Nigam Ltd. (2011) 33 STT 553 = 16 48 = 49 VST 98 (AP HC DB).
Activation charges of SIM cards are not liable to sales tax – ‘Goods’ do not include electromagnetic waves or radio frequencies. Hence, activation charges of SIM cards are not liable to sales tax – Escotel Mobile Communications v. State of Haryana (2008) 12 VST 443 (P&H HC DB).