TMI BlogService tax issues relating to authorized motor vehicle dealers and service stations -reg.X X X X Extracts X X X X X X X X Extracts X X X X ..... Department of Revenue Central Board of Excise and Customs *** To Chief Commissioners of Central Excise (All) Chief Commissioners of Customs Central Excise (All) Commissioners of Central Excise (All) Commissioners of Service Tax (All) Director General (Service Tax), Mumbai Sir/Madam, Subject: Service tax issues relating to authorized motor vehicle dealers and service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking finances / loans to such banks / NBFCs is to be subjected to service tax. Further, in case part of these incentives are passed on by the dealers to the customers, whether tax would be leviable only on that part of incentive, which is retained by the dealers or whether it would be on full amount. (e) Whether service tax is chargeable on the amounts received for servicing /repair of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. 3. As regards 'free servicing' (where the customer does not pay any charges) of the motor vehicles, normally the service charges are reimbursement by the vehicle manufacturers, who promises such a facility to attract customer. As the law does not in any way restricts the levy of service tax only on the service charges received from the recipient of the service, therefore, such reimbursements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attract them. However, this is an independent transaction between the automobile dealer and the purchaser of the vehicle, and does not involve the service rendered by the automobile dealer to the finance company. Therefore, the tax payable by the dealer would be on the gross amount received from the financial company and not on the balance amount, i.e., after excluding the amount that he passes on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arriage'. In other words, servicing, repair, reconditioning or restoration of specified types of vehicles (whether they are used for commercial purposes or not) fall under the category of taxable services. However, servicing of vehicles like trucks is not within the ambit of service tax. 6. Trade and filed formations may be advised accordingly. 7. Hindi version will follow. (Gautam Bhattach ..... X X X X Extracts X X X X X X X X Extracts X X X X
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