Commision on acc of Sale & purchase of motor vehicles & payout

[Varun Arora]

Dear Experts,

Please resolve my query.

I am engaged in the business of Sale & purchase of Motor Vehicles and holds franchisee of Mahindera First Choice.

And i am receiving Commision on account of Sale and purchase of motor vehicles from my customer as well as Payout from Mahindera first choice.

Please suggest whether service tax is applicable or not on commision as well as payout received.

Commision amount is 9 lacs and Payout amount is 3 lacs.

Thanks in advance.

AI Summary

SSI exemption for service tax may apply; commissions as trading receipts differ from commissions as taxable service.
Commission linked to actual trading margins for sale/purchase is treated as trading consideration and not a taxable service; remuneration strictly for effecting sales is a taxable service. Franchisor payouts are treated as consideration for services and fall within service tax unless covered by the small service provider exemption; exceeding that threshold requires registration and payment with applicable interest.