Service tax on dealer margin income

Tradibg of goods does not attract Service Tax (Section65D of the Finance Act).

In my view, if bill for purchase is prepared in your client name and then your client prepare bill in the name of Customer then it is purchase and sales and margin amount should be treated as profit and no service tax will be charged.

And if Bill is prepared by the Automobile company in the name of Customer (not in the name of your client) then it is commission income.

actually in routine we purchase and then after we sell to customers, but only this time company has directly supplied vehicles to customer and issued invoice in customer's name, and transfered our part of profit as dealer margin income to us.

that was clearely written in statement of company that it was dealer margin for the vehicle directly supplied to so and so customer.

Mr. Nirajs analysis is correct. Generally you say vehcile is purchsed and then sold- in that case no servic etax.

When Co sell directly and give margin to dealer, then it is a facilitating service. It is liable to ST if the basic exemption of Rs. 10 lakhs in not available to dealer. In this case clear that liability exists.