Service tax issues relating to authorized motor vehicle dealers and service stations -reg.

Business auxiliary service: dealer commissions for arranging finance are taxable on the gross amount regardless of pass throughs.

Service tax applies to mark up on spare parts sold by authorized service stations unless the items are consumed and not sold; exemption covers value of goods sold where documentary proof exists and no excise credit taken. Reimbursements from manufacturers for free services are taxable. Commissions from banks/NBFCs for arranging finance are taxable as Business Auxiliary Service on the gross amount received; pass on amounts to customers do not reduce the taxable base. Servicing of motor cars, light motor vehicles and two wheelers by authorized stations is taxable, while truck servicing is excluded.