Service Tax on Performance Incentive - appreciable performance

[CA Akash Phophalia]

 

In a recently decided case it was held that the incentive received for appreciable performance is no chargeable to service tax. The tribunal in the case of CCE Chandigarh v Facinate Advertising & Marketing 2012 (8) TMI 286 - CESTAT, NEW DELHI has held that the incentive received for appreciable performance cannot be held to be a value of the service provided and as such service tax cannot be levied on the same. The basic argument the tribunal clarified was that the incentive received for appreciable performance was not known at the time of providing service. Thus when the incentive to be available was not known at the time of providing service, hence, the same is not liable to be taxed under service tax law. Similar view was accepted in the recent case of OSWAL CABLE PRODUCTS Versus COMMISSIONER OF CENTRAL EXCISE -2014 (8) TMI 822 - CESTAT NEW DELHI

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CA Akash Phophalia

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