Service tax on incentive by parent company
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
27 December 2013
If a Parent Manufacturer gives incentives to dealers on sales scheme will it attract service tax or not
27 December 2013
Incentives given here may be of two types - (1) In the nature of reward
(2) In the nature of discount
Section 65B (44) provides that service means any activity carried on by a person for another for a consideration. In case if this incentive is treated as reward - there was no consideration when the activity was undertaken and hence no service as per Service Tax Act and consequntly no service tax.
However if we treated as discount, it would become normal trading activity and trading is in negative list - section 66D (e).
So either way incentive does not attract service tax.
(2) In the nature of discount
Section 65B (44) provides that service means any activity carried on by a person for another for a consideration. In case if this incentive is treated as reward - there was no consideration when the activity was undertaken and hence no service as per Service Tax Act and consequntly no service tax.
However if we treated as discount, it would become normal trading activity and trading is in negative list - section 66D (e).
So either way incentive does not attract service tax.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- WRONG GSTR7 ENTRIES ACCEPTED ERRONEOUSLY
- Tax on Amount transferred in HUF Account
- Nursery business
- GST input credit on commercial property
- GST REFUND ISSUE ON PURCHASE OF PLANT AND MACHINERY
- Working on Gold wastage during Melting of old gold jewellery
- TDS on Dashcam rent and allied services
- ETDS return q4 25-26
- Royalty payments to the Mining Department for procurement of murum - GST input
- Capital gains in IT returns
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
