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2024 (12) TMI 1361 - AT - Service TaxLevy of service tax - Business Auxiliary Service - sales incentives received by the Appellant from M/s MSIL for achieving specified sale target - HELD THAT - The issue is no more res integra as the issue is settled by the Tribunal in the matter of M/s Roshan Motors Ltd. 2022 (8) TMI 1254 - CESTAT NEW DELHI , wherein it is held that the dealers and manufactures work on principal to principal basis and it was further held that sale promotion activities are undertaken by the dealer is for mutual business of a dealer and manufacturer. Accordingly CESTAT, New Delhi held that such incentives cannot be treated as consideration for any service. Conclusion - The incentives received by the Appellant cannot be considered as taxable service under the category of 'Business Auxiliary Service' as held by the Adjudication authority. The impugned orders are set aside and appeals are allowed.
The Appellate Tribunal CESTAT Bangalore addressed whether sales incentives received by the Appellant, M/s A M Motors, from M/s Maruti Suzuki India Ltd (MSIL) for achieving specified sales targets fall under 'Business Auxiliary Service' for service tax purposes. The appeal concerned two periods: October 2007 to March 2013 and April 2013 to March 2014.
The Appellant, a dealer of MSIL vehicles, operates on a principal-to-principal basis with MSIL, with transactions documented through a Dealer Ledger Account. The Adjudication authority had previously confirmed a service tax demand based on an audit report, prompting the present appeal. The Appellant's counsel argued that the issue is settled by previous Tribunal decisions, notably in M/s Roshan Motors Ltd vs CC, Dehradun, which established that such incentives are not taxable as they are part of mutual business activities between dealers and manufacturers. The Tribunal agreed, noting that the incentives cannot be considered taxable under 'Business Auxiliary Service'. The Tribunal set aside the impugned orders, allowing the appeals with any consequential relief in accordance with the law. The decision was pronounced in open court on October 1, 2024.
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