As per the definition of ‘service’ under the negative list regime of service tax effective from July 1, 2012, every activity for a consideration by any person for another shall be liable to service tax unless excluded services covered under the negative list or is specifically exempted. Following transactions shall be liable for 12.36% service tax:
The incentive is paid by the company to retailers for achieving specified targets. The company shall pay the incentive to the retailers only upon achieving a specified target. The act of you performing a specific activity for which the company gives an incentive may qualify within the definition of ‘service’ under the negative list regime of service tax.
Under the erstwhile regime, any service provided by a branch office to its parent entity was generally treated as services to self, thereby not liable to service tax in India.
in the Negative list regime, ‘service’ has been defined to mean any activity carried on by a person for another for a consideration within a taxable territory.
an establishment of a person in the taxable territory and any of his other establishment in a non-taxable territory shall be treated as establishments of distinct persons.
If the place of service is outside the taxable territory of India. Hence, service tax will not be applicable on the said transaction.