07 March 2009
Dear Experts I would like to clarify my point
Recently there was a notice issued by Service Tax Dept. to the leading Computer Dealers to pay service tax on the payment received by them as discount received on purchase / Sales incentive / turnover discount.
In this instant case compu dealers are selling the branded products such as hp compaq, Lenova, ACer etc
They purchase the goods from the distributors, however they will receive the Purchase or turnover discount / Sales incentive directly from hp / lenova / acer
In this case i would like to know whether the anount received by the compu dealers by what so ever called will attract service tax under the head Business Auxilary Services or not?
If Bus Aux Ser is not attracted by Ser tax? to support this stand Is there any case law available ?
09 March 2009
There is no service tax liability. Sale and purchase, including margin of resale or trade discount or incentive for greate volume do not attract service tax.
CAclubindia
