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TMI BlogService tax liability on discountsX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear experts, One of our clients is manufacturing steel bars. For manufacturing his final products, he is getting inputs like wire rod coils, pig iron etc., from a steel unit under a discounted price. A doubt was raised that this discount appears to be income to our client and hence attracts service tax liability. However, I am of the opinion that the same is not taxable under service tax. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease clarify whether the discounts received by our client attract liability under service tax or under central excise ? - Reply By Himansu Sha - The Reply = But there appears to be no services involved. Income is accrued because the original prices were shown as expenses payable and the differences occurred due less actual expenditure. It is not a service. No service tax is payable - Reply By ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KASTURI SETHI - The Reply = I support the views of Sh.Himansu Sha, an expert. - Reply By MARIAPPAN GOVINDARAJAN - The Reply = In my view discount offered is not an income. - Reply By Govind Gupta - The Reply = please clarify your question, if the discount is reflected on invoice itself, it means you would have booked your expenses with the net amount but in a different situation where discoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is passed on separately through credit note, whether it was accounted as reduction of expenses or accrued as income and whether service tax input was also reversed if it was accounted in the second scenario. - Reply By Himansu Sha - The Reply = Some people show the expenditure payable at the debit side of the p/l account in a year. In the subsequent year p/l account when they spend less , the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discount is shown at the credit side. Better you can answer this. It is not an actual income. Rather virtual income. Somebody told , income tax act supports this - Reply By Ganeshan Kalyani - The Reply = The element of service is missing for applicability of service tax. - Reply By MUKUND THAKKAR - The Reply = Discount is part of sales Transaction. which has covered under valuation. so need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not pay service tax. I am agree of view express by all respected experts. - Reply By Gorantla Bhaskar Rao - The Reply = Dear experts, Thank you very much all the experts for your valuable information on the subject. - Service tax liability on discounts - Query Started By: - Gorantla Bhaskar Rao Dated:- 24-4-2017 Service Tax - Got 8 Replies - Service Tax - Discussion Forum - Knowledge Shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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