Vehicle loan facilitation commission is taxable as business auxiliary service, but valuation must reflect only the assessee's actual consideration.

Commission received for facilitating vehicle loans from banks is treated as business auxiliary service because the activity promotes the banks' lending business by procuring loan customers. For valuation, only the amount that forms the assessee's actual consideration can be included; if part of the bank payout was separately paid directly to customers, that portion is not includible in taxable value. The exemption claim under Notification No. 25/04-ST also required fresh consideration because it had not been examined earlier. The matter was therefore remanded for verification of the correct taxable value and decision on the exemption plea.

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Issues: (i) Whether commission received for facilitating vehicle loans from banks was chargeable to service tax as business auxiliary services; (ii) whether the taxable value comprised the entire gross payout shown by the banks or only the commission actually received by the assessee; (iii) whether the assessee's claim for exemption under Notification No.25/04-ST dated 10.9.2004 required adjudication.

Issue (i): Whether commission received for facilitating vehicle loans from banks was chargeable to service tax as business auxiliary services.

Analysis: The service rendered by the assessee consisted of facilitating loans for customers purchasing vehicles and receiving commission from banks for that activity. The legal position on similar transactions had already been settled that such activity falls within business auxiliary services when it promotes the banks' business by procuring loan business for them.

Conclusion: This issue was against the assessee.

Issue (ii): Whether the taxable value comprised the entire gross payout shown by the banks or only the commission actually received by the assessee.

Analysis: The decisive question was whether the banks paid one composite commission amount to the assessee for sharing with customers or whether a separate portion was paid directly to customers. If the commission earned by the assessee was shared with customers, the full amount would form the value of taxable services. If, however, the banks separately paid an amount directly to customers, that portion could not be included in the assessee's taxable value. The record did not clearly establish the correct position, and the TDS certificate issued by the banks was the proper basis for verification.

Conclusion: The matter had to be verified afresh to determine the correct taxable value.

Issue (iii): Whether the assessee's claim for exemption under Notification No.25/04-ST dated 10.9.2004 required adjudication.

Analysis: The exemption claim had not been examined by the lower authorities. Since the matter required remand on valuation, the exemption plea also had to be considered by the adjudicating authority.

Conclusion: The exemption claim was left for fresh decision on remand.

Final Conclusion: The demand was not finally sustained or set aside on merits; the proceedings were sent back for verification of the correct taxable value and for decision on the exemption claim.

Ratio Decidendi: Commission earned for facilitating bank loans is taxable as business auxiliary services, but only the amount actually forming the assessee's consideration can be included in the taxable value; amounts separately paid directly to customers are not includible.

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