2026-VIL-1097-CESTAT-KOL-ST
  1. Home
  2. 2026-VIL-1097-CESTAT-KOL-ST

SERVICE TAX CESTAT Cases

Service Tax – Commission on distributor sales in multi-level marketing – Service tax liability - Whether the activity of distributors in a multi-level marketing scheme who earn commissions from purchasing and sponsoring other distributors amounts to providing "Business Auxiliary Service" - HELD - Not all commission earned by distributors in a multi-level marketing structure attracts service tax. When a distributor purchases goods from the supplier and sells them in retail, the goods cease to belong to the supplier and become the property of the distributor. Therefore, the sale of such goods by the distributor does not constitute a service to the supplier, and commissions earned on such purchases represent volume discounts rather than consideration for promotional services. However, when a distributor identifies and sponsors other persons as second-level distributors and earns commission based on the performance of these sponsored distributors, such activity amounts to marketing and sales promotion of the supplier's goods and constitutes BAS - The distinction lies between commission earned on personal volume of purchases versus commission earned on the performance of the sales group. Since the impugned order demands service tax on the gross amount of commission without making this distinction, the matter requires re-adjudication to quantify the service tax demand only on commission received for sales group performance - The impugned orders are set aside and the matter is remanded to the original adjudicating authority for fresh adjudication - The appeals are disposed of by way of remand
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Weekly Summary

VIL Video

GSTAT Filing Near: Closing Resolutions...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

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?