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I am new to Power BI and trying to build a report for one of our business requirements. I have access to a Power BI dataset which I imported in the Power BI desktop version. I also need to import an excel file placed in SharePoint/OneDrive and merge the data in these two sources. When I am trying to do this, I am getting the below error.

Is this feature not available in Power BI? If not, is there a way to achieve this objective?

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You are connected to a Tabular SSAS cube or Power BI Service dataset, you can't add other data sources.

You can only mix data source types in the modes direct query and import. See the limitations section of the MS docs

One option would be to recreate the Tabular data model in Power BI, over the base table/views it is based on in direct query mode, then add the SharePoint list, or add it as a table in the Tabular/Power BI Service Dataset

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Can you please share some reference around how to recreate the tabular data model? Also, if this is done, will this data get refreshed automatically with the Power BI Service dataset?
You create the SSAS Tabular model in Power BI as it's SSAS Tabular, just with out some of the enterprise features, like perspectives etc.

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