Trade & Quantity Discount, Service Tax

[Mohammed Lakkadsha]

If a automobile Dealer Receive Quantity /Target Discount / Secondary Schemes which is purely linked to Sales of Goods from the principal manufacturer , whether it can be treated as taxable service under Negative tax Regime( Post 01.07.12) OR it is to be treated as Trading activity and hence not Taxable being Negative list Item.

Posts / Replies

[KASTURI SETHI]

We are talking about pre-GST era.

Trade discount from transaction value was allowed. It pertained to Central Excise.
Trading of goods was put into Negative List Section 66 D(e) and NOT Service provided in relation to trading of goods. Trading means transfer of title of the goods.

[YAGAY and SUN]

Under VAT/CST/Central Excise Trade discount was allowed and no tax/duty was applicable/payable on such discounts. Trading was an exempt service in erstwhile Service Tax Regime.

[DR.MARIAPPAN GOVINDARAJAN]

It should be treated as trading activity and not liable to service tax.