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.
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