2017 (7) TMI 1325 - AT - Service Tax

Business Auxiliary Services - providing space in the show room to bank and financial institution for selling of their loan product for which they are receiving the commission - demand of service tax on such commission - HELD THAT - Considering the Larger Bench decision in M/S PAGARIYA AUTO CENTER VERSUS CCE, AURANGABAD 2014 (2) TMI 98 - CESTAT NEW DELHI (LB) , which decided the issue that amount received as commission from the bank of financial institution for the sale of the loan is liable for service tax - demand upheld - appeal dismissed.

Summary

Issues involved:
1. Liability of service tax on commission received by a car dealer from banks and financial institutions for selling loan products.

Analysis:

The judgment by the Appellate Tribunal CESTAT Ahmedabad delves into the issue of whether a car dealer is liable to pay service tax on the commission received from banks and financial institutions for selling loan products in their showroom. The department demanded service tax on the commission under Business Auxiliary Services. The appellant's counsel, Sh. H.D. Dave, did not press on the ground, acknowledging the decision by the Larger Bench in the case of Pagariya Auto Center vs CCE, Aurangabad, which held that the commission received from banks or financial institutions for the sale of loans is subject to service tax.

The Tribunal, considering the precedent set by the Larger Bench, upheld the impugned order, concluding that the commission received by the car dealer is indeed liable for service tax. Therefore, the appeal was dismissed based on the established legal position as per the Pagariya Auto Center case. The judgment reaffirmed the tax liability on such commissions, aligning with the interpretation established by the Larger Bench decision.