CREDIT OF SERVICE TAX ON SALES COMMISSION

[nandankumar roy]

WE ARE IN MANUFACTURING OF PHARMACEUTICAL PRODUCTS. WE ARE PROCURING ORDER THROUGH TENDER ON ALL INDIA BASIS AND THROUGH SEP UP OF  AGENT ALSO. WE ARE PAYING SALES COMMISSION HUGE AMT WHICH IS APPLICABLE TO WITH SERVICE TAX . WE HAVE TAKEN CREDIT THE SAME SERVICE TAX AMT BUT IN LAST AUDIT EXCISE DEPT REVESED ALL THE  AMT WITH PANELTY AND INTEREST WHICH HAVE PAID BY CASH ONLY. PLEASE HELP WHETHER WE CAN TAKE THIS SERVICE TAX CREDIT OR NOT.

AI Summary

Pharma company challenges excise department's reversal of service tax credit on sales commissions under CENVAT rules. A manufacturing company in the pharmaceutical sector sought advice on whether they could claim service tax credit on sales commissions after the excise department reversed their credit, imposing penalties and interest. Contributors to the forum discussed the eligibility of service tax credit on sales promotion and commission activities, referencing a recent circular and the definition of input services under CENVAT credit rules. They emphasized the need to review specific contractual terms and audit details to understand the department's disallowance. The general consensus was that service tax on sales commissions should be admissible as input service credit.