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Service Tax on Trade Rebates, backends, incentives received

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This query is : Resolved

Prasad PN (Querist)
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16 February 2009 Dear Sirs

What is the correct status on trade rebate, turnover discounts received from a distributor by a dealer is treated? Will it attract service tax payable by the dealer?
Also the dealer gets performance bonuses like free foreign trips based on his purchase targets - how this incentive/gift etc is treated under tax laws ? will it also attract a value as income and service tax and income tax payable on them, pl clarify

annapurna

annapurna (Expert)
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15 April 2009 Service tax is levied on service rendered. Basically Business Auxilairy service include the services of the commission agent . As per my view the service tax is not payable on trade rebate, turnover discounts, performance bonus, etc. There can be implication of income tax but not service tax on such amounts.

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