Service Tax
TRT-2025-
Cestat Ahmedabad
Date:-28-11-22
In:-
Issue Favourable to Tax Payer ?:-
Order date – 28 November 2022
Facts –
- The Appellant, B M Autolink being a dealer purchase the vehicles from M/s. Maruti Suzuki India Ltd. and subsequently sell the same to various customers. The transaction between M/s. Maruti Suzuki India Ltd. and the dealer and subsequent sale transaction between the dealer and the customs are purely on principal to principal basis.
- The vehicle manufacturer M/s. Maruti Suzuki India Ltd. on the basis of yearly performance of sales grants a discount to the dealer, this discount is nothing but a discount in the sale value of the vehicle sold throughout the year therefore, these sales discounts in the course of transaction of sale and purchase of the vehicles
Issue –
- Whether the discount given by M/s. Maruti Suzuki India Ltd. to the appellant in connection with sale of vehicles which was further sold by the appellant on principal to principal basis has to be considered as service charges towards Business Auxiliary Service and the same is liable for service tax or otherwise.?
Order –
- The Tribunal observed that Hon’ble Supreme Court in the matter of case of, Moped India Ltd. vs. CCE reported that the amount of incentives and discount support received on such an account cannot, therefore, be treated as consideration for any service. The incentives and discount support received by the appellant cannot, therefore, be leviable to service tax.
- The Tribunal in respect of same appellant reported as Rohan Motors Ltd. v. Commissioner, it was held that discounts/incentives received by the appellant from MUL cannot be made liable for payment of Service Tax under BAS, since the appellant is purchasing the cars from MUL on principal to principal basis and subsequently, reselling the same.
- From the above judgment, which has considered other decisions also, it was categorically held in the identical situation, the amount received as discount/incentive from the vehicle manufacturer by the appellant being the dealer is not liable to service tax.
- The appeal is allowed.
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