Applicability of service tax

This query is : Resolved

Dhiren (Querist)
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06 June 2012 Hi....We are in distribution of FMCG products across maharashtra, and we handle various promotion scheme on behalf of our suppliers and in turn it get reimbursed to us on actual cost basis.

So let me know whether service tax will be applicable on this, if yes then under what category. What will be status after implementation of negative list based service tax, will service tax will be applicable.

Dayal

Dayal (Expert)
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06 June 2012 The manner of recovery and under which head of accounts the same is accounted needs to be elaborated. If recovered as marketing and sales promotion expenses then yes it would get covered under market research services. If goods are distributed under the scheme then value of goods will not form a part of taxable service
and that value of goods would be subject to vat as applicable in respective state. You may accordingly review your transaction