Indivisual may be treated as Commercial concerm ?

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Hukam Singh (Querist)
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11 December 2009 An Individual received Incentive during 2004-05 . Can he/she may be treated as commercial concern under Business Auxiliary Service .

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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11 December 2009 Where is the need to be called a commcercial concern in BAS. Any person couldbe liable in my view. If you could clarify what is the nature of activity answer could be more specific.

SANJAY JAIN

SANJAY JAIN (Expert)
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12 December 2009 Assuming the service is classified as commission agent falling under Section 65(19) for business auxiliary service.

The term â€œCommercial Concernâ€ was replaced by â€œ Any other Personâ€ vide Finance Act,2006 but before this amendment the term â€œCommercial Concernâ€ has never been defined in the act, so it was interpreted by the judicial forum time to time to settle the contentious issues. The inferences of these decisions broadly settled the term commercial concern as an institution or establishment that is primarily engaged in commercial activities. In another case the tribunal defined commercial concern as â€œhaving financial gain as an objectâ€. As per Illustrated Oxford Dictionary, commercial concern means â€œhaving profit as a primary aim rather than artistic valueâ€. Thus, only a commercial concern whose primary aim is to earn profit is sought to be taxed.

So in view of the above it is regardless whether incentive (commission) received by individual or partnership firm. The important is the motive to levy service tax not the structure of organization whether individual or partnership.

For further query, feel free to write sanjayinfbd@yahoo.com (M-09350048731)

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