⚖️ Legal Learning Shri Ganpati Jurists – Do You Know?
🚗 Are incentives received by automobile dealers taxable as Service Tax?
M/s. Sai Service Station Pvt. Ltd. v. Commissioner of Central Excise, Customs & Service Tax
(CESTAT Bangalore)
The CESTAT Bangalore in the case of M/s. Sai Service Station Pvt. Ltd. v. Commissioner of Central Excise, Customs & Service Tax clarified an important point.
✅ Held:
Incentives or discounts received by automobile dealers from manufacturers for achieving sales targets are NOT liable to Service Tax under Business Auxiliary Service.
📌 Key Reasons:
• The incentives are trade discounts and form part of the sale price of vehicles.
• The relationship between the dealer and manufacturer is principal-to-principal, not agent-principal.
• Since the dealer is trading goods, it falls under Section 66D(e) of the Finance Act, 1994 (Negative List).
• Trading of goods is not considered a “service.”
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