Business Auxiliary Service exemption for commission on mutual fund unit sales applies where units are treated as goods.

Commission earned for arranging sale of mutual fund units was treated as consideration for promotion or sale of goods under Business Auxiliary Service because mutual fund units were regarded as goods for this purpose. On that basis, the exemption for a commission agent under Notification No. 13/2003-ST applied to services rendered in relation to sale or purchase of goods, and the commission was not taxable under Business Auxiliary Service for the relevant period.

---

---

Issues: Whether commission earned for sale of mutual fund units during the relevant period was liable to service tax under Business Auxiliary Service, or whether the assessee was entitled to exemption as a commission agent under Notification No. 13/2003-ST.

Analysis: The dispute turned on the character of mutual fund units and the scope of the exemption for a commission agent under Notification No. 13/2003-ST. Applying the earlier tribunal view, the activity of causing sale of mutual fund units was treated as promotion or sale of goods within Section 65(19) of the Finance Act, 1994, read with the definition of goods in Section 65(50) of the Finance Act, 1994 and Section 2(7) of the Sale of Goods Act, 1930. Since the notification exempted Business Auxiliary Service provided by a commission agent in relation to sale or purchase of goods, the commission earned on such transactions was held to fall within the exemption.

Conclusion: The commission received on sale of mutual fund units was not taxable under Business Auxiliary Service for the relevant period, and the assessee was entitled to the benefit of Notification No. 13/2003-ST.

Ratio Decidendi: Where mutual fund units are treated as goods for the purpose of Business Auxiliary Service, commission earned by a commission agent for causing their sale is exempt under the applicable exemption notification.

---