TaxTMI 
TaxTMI 
2023 (11) TMI 13
X X X X Extracts X X X X
X X X X Extracts X X X X
....ickets through computer reservation system (CRS) software. The revenue has detected that the appellant received an amount of Rs. 3,45,522/- from M/s Amadeus India Private Limited as an incentive/commission for exceeding the target of the sale of air tickets. The revenue has entertained a view that the appellant has provided a Business Auxiliary Service to their principals namely M/s Amadeus India Private Limited in the form of promotion of their business and therefore a show cause notice demanding service tax of Rs. 42,707/- was issued under Section 73(1) of the Finance Act, 1994, interest and penal provisions of the Finance Act, 1994 have also been invoked. 2. The learned Advocate appearing for the appellant has submitted that the issue i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ieve a pre-determined target of sales. 74. The relevant portion of section 67 of the Finance Act, on which reliance has been placed by learned counsel for the appellant, is reproduced below: "67.(1) Subject to the provisions of this Chapter, where service tax is chargeable on any taxable service with reference to its value, then such value shall,- (i) in a case where the provision of service is for a consideration in meney, be the gross amount charged by the service provider for such service provided or to be provided by him; (ii) in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money as, with the addition of service tax charged, is equivalent to the consider....
X X X X Extracts X X X X
X X X X Extracts X X X X
....charged for providing "such taxable services and so any other amount which is calculated not for providing such taxable service cannot be a part of that valuation as the amount is not calculated for providing such taxable service" This, according to the Supreme Court, ithe plain meaning attached to section 67, either prior to its amendment on 1 May 2006 or after this amendment. 77. Consideration, which is taxable under section 67 of the Finance Act, should be transaction specific Incentives, on the other hand, are based on general performance of the service provider and are not to related to any particular transaction of service. It needs to be noted that commission on the other hand, is dependent on each booking and not on the target. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....payments. It reasoned as follows at [106]-108]: 106. The last remaining payment type is Ford's retail target incentive payment. It is clear from the "Drive for Success" program that the payment is triggered at the time, and by reason, of the Applicant's recording of a level of new sales for a relevant period of eligible vehicles to eligible customers in excess of a specified target set by Fort. Significantly, though, and unlike the fleet rebates and the run-out model support payments, the target incentive payment has no nexus with any one particular supply. It is a payment made in connection with supplies generally, or perhaps more accurately, it is a payment made in connection with the making of supplies generally. 53. On analy....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hresholds associated with running the business in this way does not mean that the dealer is supplying a service to the manufacturer for consideration. If the incentive payment were not available there is no basis to infer that the dealer would not behave in the same way for free. For these reasons there cannot be said to be any supply for consideration in these arrangements." 79. Reference can also be made to the decision of this Tribunal in Rohan Motors Limited vs. Commissioner of Central Excise, Dehradun 2020 (12) TMI 1014 - CESTAT NES DELHI+ 2020-TIOL-1676-CESTAT-DEL. The Tribunal held that incentives are not leviable to service tax. The relevant paragraph is reproduced below : - "9. The first issue that arises for consideration i....