2026-VIL-682-CESTAT-BLR-ST
  1. Home
  2. 2026-VIL-682-CESTAT-BLR-ST

SERVICE TAX CESTAT Cases

Service Tax – Taxability of Commission and bonus payments made to foreign service providers - Appellant had imported marketing services from a foreign company but failed to discharge service tax on the same. The appellant was also alleged to have made bonus payments to the foreign service providers, which were considered as part of the consideration for marketing services - Whether the commission and bonus payments made to the foreign service providers are liable to service tax under the "Business Auxiliary Services" – HELD - The bonus payments made to the foreign shareholders under the Share Purchase Agreement constitute consideration for the continued marketing and business promotion services rendered by the foreign entity and its managerial personnel, and are therefore liable to service tax under the "Business Auxiliary Services" category. The bonus payments were not automatic or assured payments but were contingent upon future events and liable to be forfeited entirely if the stipulated conditions were not fulfilled. The purchase of shares at an overvalued price and the subsequent bonus payments linked to future sales performance indicate that these payments are not towards the purchase of shares but are consideration for marketing services. Regarding the commission payments, the demand is upheld as the appellant had already paid the service tax with interest - The service tax demand on the bonus payments is upheld, while the penalty under Section 77 is set aside. The penalty under Section 78 is reduced to the amount of service tax demand on the bonus payments – The appeal is partly allowed
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GSTAT Appeal filed wrongly...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

Security-Code
New Code?
New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?