credit notes and sales incentives received by automobile dealer

[satbir singhwahi]

Sir

Please guide the service tax liability on credit notes and sales incentives received by automobile dealer.

AI Summary

Sales Incentives Attract Service Tax; Credit Notes on Goods Do Not. Clarification Resolves Dealer's Inquiry. An automobile dealer inquired about the service tax liability on credit notes and sales incentives. One respondent clarified that sales incentives attract service tax, while credit notes related to the sale of goods do not. Another contributor explained that credit notes do not involve service tax liability, as they are not considered additional consideration, unlike debit notes, which may require service tax under certain conditions. It was concluded that sales incentives related to service may attract service tax, but not if they are purely sales-related. The audit party accepted this explanation, resolving the issue promptly.