Service Tax
TRT-2025-
Cestat Ahmedabad
Date:-22-09-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 22 September 2023
Parties: J B Exports, Oswal Mills India, Oswal Prints Pvt Ltd Vs. C.C.E. & S.T.-Surat
Facts –
- The Appellant, Yokogawa India Limited engaged in exporting goods to foreign buyers. They deducted 10%/12.5% from their sale invoices, labeling it as commission.
- It was alleged that since the deduction from the invoice value was made in the nomenclature of commission. It is a commission paid to the foreign buyer and which is chargeable to Service Tax as commission agent service under ‘Business Auxiliary Service’. It was also alleged that the appellant is liable to pay service tax on the GTA service availed in respect of goods actually exported.
Issue –
- Whether the deduction labeled as commission in sale invoices constitutes a commission subject to service tax?
Order –
- The Tribunal observed that in the present transaction only appellant being a seller of the goods and foreign buyer of the goods are involved. Therefore, relationship between the appellant and the foreign buyer is of seller and buyer of the goods and the transaction is purely of sale of goods.
- n the present case no independent sales commission agent is involved. Therefore, even though the deduction was made in the invoice under nomenclature of commission but the same is not in the nature of commission, but it is only a discount and the sales discount cannot be termed as a service charge.
- This issue has been considered in various judgments by this Tribunal and Tribunal has taken a consistent view that merely by mention of commission or any other term, whereby the deduction was given in the sale invoice, the same cannot be treated as commission for the purpose of levy of Service Tax under ‘business Auxiliary Service’. Accordingly, the demand of service tax on the commission shall not sustain.
- If at all there is a service tax liability on the commission the appellant is not only entitled for Cenvat credit but also prima facie eligible for refund, as the said commission service is exclusively in respect of export of goods. For this reason, the demand for extend is not invokable. Accordingly, the demand of service tax on the commission as well as on GTA service is not sustainable also on the ground of limitation.
- The appeals are allowed.
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