Giving discounts is common industry practice prevalent across all sectors such as Automobile, FMCG etc. With litigations recently initiated by Directorate General of Goods and Services Tax Intelligence (‘DGGSTI’) against automobile dealers, the issue had risen to fore again. The DGGSTI has raised demand of service tax on discounts along with interest and penalty against automobile dealers. The issue seems to be settling with favourable rulings across forums. The issue assumes equal importance in GST regime as well.

In recent ruling in the case of TV Sundram Iyengar & Sons Private Limited v. Commissioner of CGST & Central Excise, 2021-VIL-391-MAD-ST, the Madras High Court held that no Service Tax was payable on discounts in Negative List Service Tax regime. This decision has significant bearing on ongoing litigations.

To give you detailed insight on this ruling, we are pleased to share short video by our Senior Associate, Anshika Agarwal, Service Tax on Discounts – Madras High Ruling in TV Sundaram Iyengar & Sons. In this video, Anshika has succinctly discussed: 

• Background of the issue;

• Observations by Madras High Court;

• Other rulings; and

• Way Forward

The video is available at

Hope you find this an interesting watch. Please feel free to share your views and comments on this video.