Services by Telecom sector are not goods under law: SC

New Delhi, Mar 2 (UNI) In a major financial gain to service providers in the Telecom sector including the Bharat Sanchar Nigam Ltd (BSNL), the Supreme Court today held that the services provided by them do not constitute as goods under the Sales of Goods Act and are therefore not taxable under the Sales Tax Act.

A bench, comprising Ms Justice Ruma Pal, Mr Justice A R Lakshmanan and Mr Justice Dalveer Bhandari, while disposing of a bunch of petitions filed by the service providers also dismissed the contempt petition by the states against the petitioner.

The court laid down certain criterions for determination of sales such as articles being sold are goods, the buyer must have absolute right to use such goods and the right has to be to the exclusion of the transferor.

''A license to use goods is not sale,'' the Supreme Court has held.

In the present case, the transaction is rendering of services and hence the plea that the transaction amounts to sale of goods is untenable and no goods element is present.

The court also held that handsets and other electronic goods are, however, goods under the Sales of Goods Act.

UNI AKS/SC HS GC1316