leviability of service tax on authorised service stations/showrooms of motor vehicles

[Guest]

WHETHER SERVICE TAX LEVIABLE ON INCOME EARNED BY AUTHORISED SERVICE STATIONS/SHOW ROOMS OF MOTOR VEHICLES AS INCENTIVE FROM ICICI/HDFC BANK DUE TO FINANCE DONE BY PURCHASER OF VEHICELES FROM ICICI OR HDFC ALOTHOUGH SHOWROOM DOESNOT HAVE ANY CONTRACT EITHER WITH FINANCE CO OR PUCHASER. NEITHER ANY SERVICES IS BEING PROVIDED BY THE SHOWROOM/AUTHORISED SERVICE STATION...???

[Ravi Chopra]

In my opinion, any commission or income earned from the activities pointed out in the above query is liable to service tax under the category of business auxiliary service. The term commission agent in this category is vary wide term as well.

AI Summary

Business auxiliary service: incentives to vehicle showrooms treated as taxable commission income under service tax law. Incentives or commission-like receipts paid to authorised motor vehicle showrooms or service stations by financiers in relation to purchaser financing qualify as commission income and fall within the scope of business auxiliary service, given the wide coverage of the commission agent concept, even where the showroom has no contract with the financier or purchaser and does not provide identifiable services to the purchaser.