Service tax applicability

[Guest]

One of my client is authorised dealer of Maruti Udyog Ltd. Maruti Udyog Ltd. sells extened warranty thru dealership and in retrun it share part of it sale price with dealers. Whether service tax is applicable on this amount received from MUL. Whether dealer is bound to deposit service tax on this amount. No Vat is applicable on sale / purchase of this extended warranty booklet.

AI Summary

Service Tax Applicable on Commissions for Selling Extended Warranties by Maruti Dealers; No VAT on Warranty Booklets. A client, an authorized dealer of Maruti Udyog Ltd., inquired about the applicability of service tax on amounts received from Maruti Udyog Ltd. for selling extended warranties. The reply indicated that if Maruti Udyog Ltd. categorizes this amount as a commission paid to the dealer, then service tax is applicable. No VAT applies to the sale or purchase of the extended warranty booklet.