#Trade Discounts

CESTAT Chennai rules that abatement for trade discounts in jewellery trade can be granted based on consolidated sales data and Chartered Accountant certificates, without requiring transaction-wise correlation. This eases compliance burdens for manufacturers adopting provisional assessments under Rule 7 of Central Excise Rules, particularly in industries with fluctuating prices and indirect sales channels.

CESTAT Kolkata rules that incentives and trade discounts received by car dealers from manufacturers constitute trading profits, not taxable services under Business Auxiliary Service. This removes a major compliance burden on auto dealers and invalidates extended limitation demands where no suppression of facts is proven, setting a critical precedent for dealer-tax disputes across India.

CESTAT Hyderabad holds that service tax cannot be levied on trade discounts and penalty is unsustainable where non-payment stems from legal ambiguity, not deliberate evasion.