2023 (4) TMI 1369 - AT - Service Tax

Levy of service tax - incentives for achieving the sales target - Whether can be considered as commission for providing business auxiliary service - HELD THAT - This issue has been decided in M/s DD Motors 2018 (11) TMI 1763 - CESTAT NEW DELHI hold on the question of whether the service tax is leviable on the amount of the incentive received by the appellant from M/s Maruti Udyog Ltd. for achieving certain sales targets, we hold that same is not taxable under the category of the business auxiliary service as same being in the form of a trade discount received by the appellant from the supplier of vehicles. This decision has been followed by the Tribunal in Rohan Motors Ltd. 2020 (12) TMI 1014 - CESTAT NEW DELHI Assessee appeal allowed.

Summary

The Appellate Tribunal CESTAT NEW DELHI, with HON'BLE MR. JUSTICE DILIP GUPTA and HON'BLE MS. HEMAMBIKA R. PRIYA, considered whether incentives for achieving sales targets can be taxed as commission for "business auxiliary service." The Tribunal referenced a previous decision and held that such incentives are not taxable as they are akin to trade discounts. The Commissioner's order demanding Service Tax was set aside, and the appeal by M/s Audi Motors was allowed. The decision was in line with previous rulings and was also followed in another case involving Rohan Motors Ltd.