TaxTMI 
TaxTMI 
2023 (8) TMI 253
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....revealed the receipt of Rs.9,91,954/- and Rs.4,42,174/- for the periods 2007-08 and 2008-09 respectively. 2. Upon enquiry, the Department appears to have found that the appellant was making payments to their suppliers only after sixty days and if the supplier wanted earlier payment, 5% of the value of the bill was deducted by the appellant, which was shown in the appellant's balance sheet as income under "Bill discount". 3. From the above, the Revenue entertained a doubt that the appellant did render service within the meaning of Section 65(12)(a)(ix) read with Section 65(105)(zm) of the Finance Act, 1994 and thus, a Show Cause Notice dated 19.06.2009 was issued proposing to demand Service Tax under 'banking and other financial services'.....
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....hority does not specifically spell out as to how the service is involved in a bill discounting scheme. * In a bill discounting scheme, there is no service by the seller to the buyer nor is there any service by the buyer to the seller and therefore, neither the seller nor the buyer could be the service provider or service receiver. * The appellant is not initiating the bill discounting scheme as a service provider as contemplated under Section 65(12)(a)(ix) ibid. since no consideration was received by them. * The appellant had only availed the facility of discount against prompt payment, which is a direct facility given to the appellants as buyers in terms of the purchase orders. 8.2 Thus, the Ld. Advocate prays for setting aside of t....
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....ing, issue of pay order, demand draft, cheque, letter of credit and bill of exchange, transfer of money including telegraphic transfer, mail transfer and electronic transfer, providing bank guarantee, overdraft facility, bill discounting facility, safe deposit locker, safe vaults; operation of bank accounts;" 13.1 The transaction/activity, as explained by the appellant in its reply to the Show Cause Notice is that: - "... discounts granted to the buyer as per the bill discounting scheme are in the nature of cash discounts or prompt payment discounts. These discounts granted by the sellers enable buyers to honour the Bills early to avail of reduction in price. They are not any consideration for rendering any service towards 'sales promo....