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    1. The document discusses whether Birla Tyres' marketing agents can be considered commission agents and thus exempt from paying service tax. 2. It analyzes the definitions of commission agent and clearing/forwarding agent, finding that marketing agents perform duties of both and are therefore considered clearing/forwarding agents. 3. As clearing/forwarding agents are liable to pay service tax, the exemption notification for commission agents does not apply to Birla Tyres' marketing agents.

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    1. The document discusses whether Birla Tyres' marketing agents can be considered commission agents and thus exempt from paying service tax. 2. It analyzes the definitions of commission agent and clearing/forwarding agent, finding that marketing agents perform duties of both and are therefore considered clearing/forwarding agents. 3. As clearing/forwarding agents are liable to pay service tax, the exemption notification for commission agents does not apply to Birla Tyres' marketing agents.

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    1. The document discusses whether Birla Tyres' marketing agents can be considered commission agents and thus exempt from paying service tax. 2. It analyzes the definitions of commission agent and clearing/forwarding agent, finding that marketing agents perform duties of both and are therefore considered clearing/forwarding agents. 3. As clearing/forwarding agents are liable to pay service tax, the exemption notification for commission agents does not apply to Birla Tyres' marketing agents.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    66 views2 pages

    BT ST Sa

    Uploaded by

    api-3822396
    1. The document discusses whether Birla Tyres' marketing agents can be considered commission agents and thus exempt from paying service tax. 2. It analyzes the definitions of commission agent and clearing/forwarding agent, finding that marketing agents perform duties of both and are therefore considered clearing/forwarding agents. 3. As clearing/forwarding agents are liable to pay service tax, the exemption notification for commission agents does not apply to Birla Tyres' marketing agents.

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    of 2

    Sri R.K.

    Shah October 17, 2008


    V.P. ( Commercial)
    Birla Tyres
    Shivam Chambers
    53 Syed Amir Ali Avenue
    Calcutta – 700 019

    Dear Sir,

    As discussed with you my opinion on applicability of exemption notification from payment


    of service tax for Marketing Agent of Birla Tyres is as follows:-

    Business auxiliary services were brought into service tax net w.e.f. 1.7.2003. As per
    definition of business auxiliary services, services as commission agent are considered
    business auxiliary service. However services of commission agents have been exempted from
    service tax w.e.f. 1st July, 2003 vide notification no. 13/2003 dated 20th June, 2003.
    Commission agent has been defined in the notification, as a person who causes sale or
    purchase of goods, on behalf of another person for a consideration, which is based on
    quantum of such sale or purchase.

    The question arises whether Marketing agent appointed by Birla Tyres can be considered as
    Commission agent within the definition of notification no. 13/2003 dated 20th June, 2003. A
    circular no. 59/8/2003 dated 20th June, 2003 was issued to clarify the distinction between a
    commission agent & a clearing and forwarding agent. It was stated in the above circular that
    a consignment agent’s job is to receive goods from the principal and dispatch them on the
    directions of the principal, whereas a commission agent’s job is to cause sale/purchase on
    behalf of other person. Thus, the essential difference is that a commission agent sells or
    purchases on behalf of the principal while consignment agent receives and dispatches the
    goods on behalf of the principal. It is possible that a person may be consignment agent as
    well as a commission agent. Such a person would already be covered in the category of
    Clearing and Forwarding agent and would be liable to pay service tax in that category. In
    other words, the present exemption notification is available only to such commission agent
    who is not a consignment agent.

    The agreement between Birla Tyres and its Marketing agent is for performing the duties of
    clearing, receiving, warehousing, safe storing, selling, dispatching, collecting payments and
    discharging other functions. On reading of the agreement it appears that Marketing agents are
    performing the duties of both consignment agent and commission agent. Hence as per
    abovementioned circular no. 59/8/2003 dated 20th June, 2003 marketing agents are already
    covered in the category of Clearing and Forwarding agent and would be liable to pay service
    tax in that category. Which means the present exemption notification no. 13/2003 dated 20th
    June, 2003 is not applicable to marketing agents.

    You may contact the undersigned for any further clarification in this regard.

    Thanking You,

    Yours faithfully,
    For Agarwal Shraff & Co.
    Chartered Accountants

    (Vinay Kumar Shraff)


    Partner

    CC : Sri S.K. Parikh


    Sr. president & Company Secretary
    Keshoram Industries Limited

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