2018 (5) TMI 1060 – CESTAT MUMBAI – TMI – Business Auxiliary Services – whether the activity of the appellant which is in the form of, business auxiliary service', as claimed by Revenue, in the multilevel marketing is taxable or otherwise? – Held that: – the issue is now settled by the judgment of this Tribunal in the case of Charanieet Singh Khanuja v. Commissioner of Service Tax, Indore/Lucknow/Jaipur [2015 (6) TMI 585 – CESTAT NEW DELHI], where it was held that service tax would be chargeable on the commission received by a Distributor from Amway on the products purchased by his sales group. For quantifying the Service tax demand on the commission received from Amway on the volume of purchase made by the distributors sponsored /enrolled by a particular distributor i.e. the Distributor's sales group, these matters would have to be remanded to the Original Adjudicating Authority.
–
Following the same, the matter is remitted back to the adjudicating authority to reconsider the iss
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
he judgment of this Tribunal in the case of Charanieet Singh Khanuja v. Commissioner of Service Tax, Indore/Lucknow/Jaipur 2016 (41) STR 213 (Tri.Del). The ratio of the judgment would apply in the case in hand also. The ratio of the judgment of the Tribunal is in paragraph No. 12 and 13 12. According to the Department, the activity of the assessees is "promotion or marketing or sale of the goods produced or provided by or belonging to the client." In our view, the activity which is covered under Section 19(i) is in relation to the promotion or marketing or sale of the goods produced by the client or provided by the client or belonging to the client. This expression, in our view, would not cover the sale of the goods by a person, which belong to him, as the activity of the promotion or marketing or sale of the goods by a person belonging to him would not constitute service. The assessees in these cases are distributors, who purchase the goods from Amway at the Distributors h A
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
tor, but is linked to the goods purchased by the Distributor from Amway during a month and is in the nature of volume discount. Therefore, no service tax is chargeable on the profit earned by the distributors from sale of the goods in retail which had been purchased by them from Amway and on the commission earned by them every month on purchase of certain quantum of goods from Amway. 13. However, activity of a Distributor of identifying other persons, who can be roped in for sale of the Amway products/marketing of the Amway products and who on being sponsored by that Distributor are appointed by Amway as second level of distributors is, in our view, the activity of marketing or sale of the goods belonging to Amway and the commission received by the Distributor from Amway, which is linked to the performance of his sales group (group of the second level of distributors appointed on being sponsored by the Distributor) would have to be treated as consideration for Business Auxiliary Servic
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =