TaxTMI 
TaxTMI 
Commision on acc of Sale & purchase of motor vehicles & payout
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....ommision on acc of Sale & purchase of motor vehicles & payout<br> Query (Issue) Started By: - CA. Varun Arora Dated:- 7-10-2016 Last Reply Date:- 13-10-2016 Service Tax<br>Got 10 Replies<br>Service Tax<br>Dear Experts, Please resolve my query. I am engaged in the business of Sale & purchase of Motor Vehicles and holds franchisee of Mahindera First Choice. And i am receiving Commision on account....
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.... of Sale and purchase of motor vehicles from my customer as well as Payout from Mahindera first choice. Please suggest whether service tax is applicable or not on commision as well as payout received. Commision amount is 9 lacs and Payout amount is 3 lacs. Thanks in advance. Reply By Rajagopalan Ranganathan: The Reply: Sir, Since the total amount received by you exceeds the small scale exemp....
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....tion meant for Services you have pay service tax on the same . The service provided by you are classifiable as 'services not under negative list'. Reply By Ganeshan Kalyani: The Reply: Both commission and pay out received by you is toward the service that you have rendered. Hence eligible to service tax. Reply By Ganeshan Kalyani: The Reply: It is advisable to get registration number. ....
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....And after getting the service tax RC number you should pay the tax along with applicable upto date interest. Reply By Ganeshan Kalyani: The Reply: Service tax shall not be applicable on first ₹ 10 Lacs consideration, and on excess of the said amount Service is payable. Reply By MARIAPPAN GOVINDARAJAN: The Reply: I endorse the views of Shri Rajagopalan. Reply By CA. Varun Arora: The Repl....
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....y: Dear All, Thank you all for your valuable replies , In this case as i mentioned i holds franchise of Mahindera first choice in this case whether exemption of rs 10 lcas shall be available to me or not because i am running the workshop as well as showroom under the brand name of Mahindera First choice. Thanks a ton. Reply By Ganeshan Kalyani: The Reply: You are eligible for SSI exemption. B....
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....ut then in your query it is mentioned that commission crossed the SSI limit, hence the experts opined the service is taxable. Reply By Mahir S: The Reply: 1) You are carrying out sale of purchase of Motor Vehicles for which you have received commission of ₹ 9 Lacs. This commission is nothing but Profit earned for sale/purchase of Vehicles which is a trading activity.. Hence, here no servic....
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....e tax applicable thereon. 2) Yes, you are required to pay service tax for the Payout amount received from Mahindra First Choice. Since this amount is ₹ 3 Lacs is under the threshold limit , therefore no service tax required to be paid till ₹ 10 Lacs. In view of above, no service tax is required to be paid. Further, no service tax liability even if the commission amount of ₹ 9 ....
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....Lacs referred in para 1 above crosses 10 Lacs limit. Reply By Ganeshan Kalyani: The Reply: The term commission is used in query. Commission refers to a sort of incentive / remuneration for effecting sale and purchase. Whether the price of vehicle is paid to the supplier on purchase or sale price of vehicle is received on sale to customer. If the same is the case then it would be a trading activi....
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....ty which is exempt from service tax. VAT will be applicable then on sale and purchase transaction. Reply By Ganeshan Kalyani: The Reply: If the vehicle is received from the supplier for affecting sale and commission is receivable only when sale takes place then it tantamounts to service and service tax is applicable on commissions received.<br> Discussion Forum - Knowledge Sharing ....