AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 990
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....ax for incentives granted by the manufacturer to the appellant /dealer. 2. The appellant being the holder of Service Tax Registration No. AABCP2035QST010 is the authorised dealer of M/s Maruti Suzuki India Ltd. ( hereinafter referred to as MSIL). That by virtue of a dealership agreement dated 01.01.2016 they were engaged as dealer for sale-purchase and also for providing services of maintenance and repair of vehicles. 3. Based upon an intelligence regarding non payment of service tax in relation to payments received as incentive / discounts reimbursements which were in the nature of consideration for service, an investigation was initiated against the appellant. Accordingly, Show Cause Notice dated 12.4.2019 was issued to the ap....
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....ax. They have also raised the issue of limitation as the Show Cause Notice was issued on 12.4.2019 covering the period from April 2013 to June 2017 and hence the same is barred by time. 7. The authorised representative for the revenue has supported the findings of the authorities below. 8. The issue which arises for our consideration is whether service tax is leviable on incentives / discount reimbursement extended by MSIL to the appellant. 9. The issue is no longer res integra and as referred to by the Learned Counsel for the appellant the same has been considered and decided in favour of the assessee in the following cases: (i) Rohan Motors Limited vs. Commissioner of Central Excise [2021 (45) GSTL 315 (Tri-Del.)] ....
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....ustomers are purely on principle to principal basis. The vehicle manufacturer M/s Maruti Suzuki India Ltd. on the basis of yearly performance of sale grants the discount to the dealer, this discount is nothing but a discount in the sale value of the vehicle sold throughout the year therefore these sales discount in the course of transaction of sale and purchase of the vehicles hence, the same cannot be considered as service for levy of service tax." 11. The Larger Bench of this Tribunal in the case of Kafila Hospitality and Travels Pvt Ltd (supra) dealt with the issue whether service tax can be levied under the category of 'Business Auxiliary Service' on target based incentives paid to the travel agents by the Airlines as they we....
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....as consideration as the incentives would be in relation to all supplies and not in relation to a particular supply. The relevant portion of the decision of the Federal Court is reproduced below:- 53. On analysis, the so-called supplies for consideration identified by the Commissioner are nothing more than the encouragement of an overall business relationship between the manufacture and the dealer to the mutual benefit of both. The relationship involves a whole raft of obligation from one to the other all, presumably, with the ultimate objective of maximizing their respective commercial positions. As the AP Group put it, the overall relationship contemplates a continuing dialogue between wholesaler and retailer in which promises are....
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.... is squarely covered by the law laid down in those judgments. We have examined the dealership agreement entered between MSIL and the appellant and we find that MSIL is engaged in manufacturing, marketing and selling of motor vehicles and the appellant purchases the vehicles from the manufacturer as their authorised dealer on principal to principal basis. The relevant clause is quoted herein below: " C. MSIL having considered the representations made and the application submitted by the Dealer agrees to appoint the Dealer as the Authorised Dealer. It is made clear that MSIL would sell the products and parts to the dealer on principle to principal basis. The dealer would sell the products and parts and would provide service to the cu....