Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (12) TMI 541 - CESTAT MUMBAI

2016 (12) TMI 541 - CESTAT MUMBAI - TMI - Levy 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 inst .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ved 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e 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. - APPEAL No.ST/81 & 149/2012 - Order No.A/93871-93874/16/STB - Dated:- 17-11-2016 - Shri Ramesh Nair, Member (Judicial) And Shri C J Mathew, Member (Technical) Shri S.B. Gabhawala, Chartered Accountant for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e price at which the appellant sells to customers. 2. Separate appeals have been preferred against two orders-in-original pertaining to the period from July 2004 to March 2007 and from April 2007 to March 2011. The demands confirmed in the two appeals are ₹ 1,58,69,430/- and ₹ 1,57,12,236/-; the impugned order holds appellant liable to tax on commission earned on sale of cars, on facilitation charges collected from customers for registration of vehicles and commission foregone on loa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Motor Limited is one of supply of vehicles by the latter on principal-to-principal basis on which title and risk, as per Agreement, are passed on to appellant when the vehicles are excise cleared and placed on common carrier. Depending on order quantity, the manufacturer raises invoices after according discounts which are designated as commission/incentive merely as a management terminology. Learned Chartered Accountant for appellant places reliance in the decisions of the Tribunal in Jaybharat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of incentives received by the appellant from the car dealer, we find that the relationship between the appellant and the dealer is on a principal to principal basis. Only because some incentives/discounts are received by the appellant under various schemes of the manufacturer cannot lead to the conclusion that the incentive is received for promotion and marketing of goods. It is not material under what head the incentives are shown in the Ledgers, what is relevant is the nature of the transactio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sale of vehicles and incentive on sale of spare parts for promoting and marketing the products of MUL, the contention is that these incentives are in the form of trade discount. The assessee respondent is the authorized dealer of car manufactured by MUL and are getting certain incentives in respect of sale target set out by the manufacturer. These targets are as per the circular issued by MUL. Hence these cannot be treated as business auxiliary service. 4. Learned Authorized Representative reite .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

9,75,772/- are due as taxes for rendering of business auxiliary services . Learned Chartered Accountant draws our attention to the decision of the Tribunal in Wonder Cars Pvt Ltd v, Commissioner of Central Excise, Pune - I [2016-TIOL-190-CESTAT-MUM]. This Tribunal, in its recent order in M/s Arpanna Automotives Pvt Ltd v. Commissioner of Customs & Central Excise [Final order no. A/85827 - 85828/16/STB dated 3rd February 2016], held that 7. In our considered view helping the purchaser with re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ess and commerce . 8. In view of the foregoing, the Service Tax liability confirmed under Business Auxiliary Service for the amount of RTO registration fees is set aside. As regards the penalty imposable, we find the Service Tax liability of the amounts received from the various financial institutions, whether is taxable otherwise was settled by the Larger Bench, there were two different streams of the decisions contradicting each other. As the issue needs to be settled by the Larger Bench, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed by bringing financial institutions and buyers together. For this, financial institutions offer them a commission on the loan amount sanctioned of which a portion is passed on the customer as an upfront subvention of the total interest payable. The appellant pays tax only on the actual commission received and the impugned order has confirmed tax of ₹ 18,28,528/- and ₹ 3,80,825/- for the two periods in dispute. Learned Authorized Representative relies upon Jaybharat Automobiles Limi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se of the appellant. 8. We have perused the decisions cited by both sides. 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 por .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version