reading sms

Change some of your code to look like this:

        Serial.print("data: [");
        Serial.print(data);    //shows the message
        Serial.println("]");
        if(strcmp(data, "on") == 0)
        {
           Serial.println("Turning LED on");
           digitalWrite(led,HIGH);
        }
        if(strcmp(data, "off") == 0)
        {
           Serial.println("Turning LED off");
           digitalWrite(led,LOW); // Turn the pin off
        }

Show us the serial output.