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TMI Blog2023 (6) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... Air Travel Agent, Cab Operator and Rail Travel agent service as per the provision of Section 69 of Finance Act, 1994. The appellant had been receiving "Overriding Commission" during the Financial Assessment year 2005 -2006 to 2007 - 2008. The appellant received an amount of Rs. 1,21,311/- as " overriding commission" from various air lines. Similarly an amount of Rs 91,588 was also received for period April, 2010 to March, 2011 as "Overriding Commission". The "Overriding Commission" which the appellant received from various Airlines was an incentive for achieving targeted business to booking Air Ticket for their customers. 2. It is a matter of record that the appellant had entered into an agreement with the Airlines to enhance the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Bench of this Tribunal in the case of M/s. Kafila Hospitality & Travels Pvt. Ltd Vs. reported under 2021 (47) GSTL 140 (Tri.-LB-Delhi). The relevant extract of the same is reproduced here below:- "72. The contention advanced by Learned Counsel of the interveners is that incentives cannot be construed as "consideration" and if it is so, no service tax can be levied on this amount because under Section 67 of the Finance Act, service tax is leviable on "consideration", which is the gross amount charged by the service provider for rendering a particular taxable service. 73. It would, therefore, be appropriate to examine the scope of the term "incentives". Incentives are generally given to encourage performance of a party. The factual pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der. It is, therefore, clear that only such amount is subject to service tax which represents consideration for provision of service and any other amount which is not a consideration for provision of service cannot be subjected to service tax. 76. In this connection, it would be appropriate to refer to the decision of the Supreme Court in Union of India v. Intercontinental Consultancy and Technocrats [2018 (10) G.S.T.L. 401 (S.C.)]. The Supreme Court observed that service tax is on the "value of taxable services" and, therefore, it is the value of the services which are actually rendered which has to be ascertained for the purpose of calculating the service tax. It is for this reason that the expression "such" occurring in Section 67 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the decision of the Federal Court is reproduced below :- "17. Insofar as the Ford "retail target incentive" payments are concerned, Ford agreed with its dealers to pay certain sums of money to dealers which achieved monthly and quarterly sales targets that Ford set based on the dealer's size and past performance. Targets were based on the number of cars sold to eligible customers in the qualifying period, not the value of the cars sold. Once a car was sold and delivered to an eligible customer the details would be entered into the vehicle information system and, in about the middle of the following month, based on the information so entered Ford would issue the dealer with a tax invoice for the incentive payment plus 10% GST and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply is unrealistic and impractical. To characterize the payment of the incentives intended to encourage the overall relationship to operate efficiently as involving supplies for consideration equally unpersuasive. A dealer will always wish to sell as many cars as practicable and to move old stock to make way for new stock. So too a dealer will always wish its ordering arrangements to be the most efficient and economically beneficial to it. The manufacture will have the same objectives. It is this context which underpins the Tribunal's conclusion that the payments are not for the supply of anything by the dealer. As the Tribunal said at the dealer (which must be inferred to act in an economically rational manner in the ordinary course) wil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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