Trade & Quantity Discount

[CA.Mohammed Lakkadsha]

Post Negative Tax Regime ( After 01.07.12) Quantity Discounts or Schemes received by the dealers of Motorcycles from Principal Manufacture on Principal to Principal basis is taxable services and can be brought in purview of Services as Declared services.OR it is being purely related to Trading activity should be classified as Trading activity not Taxable under Service Tax.

[YAGAY andSUN]

please re frame your query for our better understanding and enabling us to revert quickly.

[KASTURI SETHI]

Dear Querist, . You are mixing Central Excise and Service Tax. Discount was allowed from transaction value. Correct reply can be posted only after correct and clear query. Post query again as advised by M/s.YAGAY And SUNS, Sirs.

AI Summary

Taxability of quantity discounts depends on classification as declared services or as non-taxable trading activity. Whether quantity discounts from a principal manufacturer to motorcycle dealers post 01.07.2012 are taxable hinges on classification: as a declared service they may be taxable, whereas if they are a commercial concession constituting trading activity they are not service-taxable. Replies sought clarification and highlighted a mix-up between central excise and service tax concepts and that discounts affect transaction value; resolution requires clearer facts about the contractual terms, consideration flow, and accounting treatment.