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2016 (12) TMI 541 - AT - Service TaxLevy of tax - commission earned on sale of cars - facilitation charges collected from customers for registration of vehicles - commission foregone on loans marketed by appellant to customers - Held that: - One of the essential requirements in taxing of services is the existence of ‘service-provider’ and ‘recipient of service’ with the latter making over the agreed upon consideration to the former. Appellant, admittedly, markets products of financial institutions for which they are entitled to a commission. There is common ground here on the taxability of commission as received. However, the appellant claims to have waived a portion of the commission otherwise receivable which the bank then uses to reduce the consideration that it receives for such financing from customers. It would appear that consideration not received by the appellant from the financial institutions for one service is adjusted to compensate for the reduced consideration received by the financial institution for another service rendered to another recipient. The manner in which the financial institution treats these outflows of commission and inflow of interest would unlock the proper perspective of consideration in these transactions, particularly, the one between the appellant and the financial institution. This is an aspect that has not been attended to in the impugned order. Likewise the contention of the appellant that there are errors in computation among which are inclusion of the amounts not received during the period when tax was leviable only on receipts, the non-adjusted excess tax paid in the half-yearly returns in comparison with financial statements, inclusion of bad debts and reversals in the taxable value and the inclusion of credit entries without netting the debit entries. These are crucial to determination of taxable value and will have to be considered. To enable a re-visit of the taxability of subvented amounts as well as the above-mentioned accounting entries, we deem it appropriate that the matter be remanded to the original authority for deciding afresh on the last two issues. The other two issues are not the subject of this remand as they stand decided in favour of appellant - appeal allowed by way of remand.
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