Ashok Leyland Finance Ltd. v. CST

FINANCE ACT, 1994

--Business Auxiliary Service--Discount received from vehicle dealer for disbursement of loanTaxability----Where the vehicle dealer was not the client of assessee as the borrower who was availing the loan was its client, the discount received by assessee from vehicle dealer could not be considered as a consideration received for providing Business Auxiliary service.--Assessee was engaged in providing Banking and other Financial Services. Revenue took the view that the amount received by assessee towards dealer commission would fall under the category of Business Auxiliary service (BAS). Assessee contended that it had entered into a contract with the vehicle dealer and by such contract, a small amount was retained for disbursement of loan to borrower for purchasing the vehicle and such amount was merely a discount and not a commission or consideration for services. Held: Since the vehicle dealer was not the client of assessee as the borrower who was availing the loan was its client, the discount received by assessee from vehicle dealer could not be considered as a consideration received for providing Business Auxiliary service.