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.

[KASTURI SETHI]

We are talking about pre-GST era.

Trade discount from transaction value was allowed. It pertained to Central Excise.
Trading of goods was put into Negative List Section 66 D(e) and NOT Service provided in relation to trading of goods. Trading means transfer of title of the goods.

[YAGAY and SUN]

Under VAT/CST/Central Excise Trade discount was allowed and no tax/duty was applicable/payable on such discounts. Trading was an exempt service in erstwhile Service Tax Regime.

[DR.MARIAPPAN GOVINDARAJAN]

It should be treated as trading activity and not liable to service tax.

AI Summary

Trade discount treated as trading activity, not a taxable service under the negative list regime post reform.
Quantity/target and secondary discounts linked to sale of goods are trade discounts that reduce transaction value and, being tied to the transfer of title, are treated as trading activity exempt under the negative list service tax regime rather than as a separate taxable service.