Service tax on credit note

[SAKHARAM MAGDUM]

We paid commission to the party which credit note is raised to the party who is given us a order. What is the effect in excise/service tax ? Who will be pay the service tax?

AI Summary

Commission Paid via Credit Note Considered a Discount, Not Taxable as Service: Avoids Excise and Service Tax Issues. A query was raised regarding the service tax implications of a commission paid via a credit note to a party that placed an order. The response clarified that if the commission is paid to the party itself, it should not be considered a commission since one cannot provide a service to oneself. Instead, it should be treated as a discount or subvention. By categorizing it as such, no excise or service tax would be applicable, thereby avoiding potential complications.