Trade & Quantity Discount

[CA.Mohammed Lakkadsha]

If a automobile Dealer Receive Quantity /Target Discount / Secondary Schemes which is purely linked to Sales of Goods from the principal manufacturer , whether it can be treated as taxable service under Negative tax Regime( Post 01.07.12) OR it is to be treated as Trading activity and hence not Taxable being Negative list Item.

AI Summary

Automobile Dealer Discounts: Clarified as Non-Taxable Trading Activity, Not a Service Under Post-01.07.12 Tax Regime An automobile dealer questioned whether receiving quantity or target discounts from a manufacturer should be considered a taxable service under the post-01.07.12 negative tax regime or treated as a non-taxable trading activity. Three responses clarified that during the pre-GST era, trade discounts were part of the transaction value and exempt from tax under VAT/CST/Central Excise. Trading was included in the negative list, meaning it was not considered a service liable for service tax. Therefore, such discounts should be treated as trading activity and not subject to service tax.