Prize tax payment
I won an apple laptop in a contest conducted by eBay on Oct 25,2016 they asked me to pay price tax for delivering the prize i asked them that i will pay the tax amount after receiving the prize but they are not agreed so can i send a legal notice to them that i will pay tax after receiving the prize please give suggestions
Answer 1
According to Section 65 B of the Service Tax rules, 1994, online lotteries or lucky draws are also taxable.
This means that the service provider- in this case “e-bay” is liable for payment of service tax to the government. If you compare this example to that of a home delivery from a restaurant- you pay a certain amount as bill; which also includes service tax, which is payable to the government by the restaurant owner/s, and the said food item/s will not be handed to you till you pay the bill . Similarly, in this case, the company “e-bay”, has to pay a certain service tax to the government and is rightfully not delivering the product to you till you pay the amount as post delivery, there is a risk that a customer might fraudulently not pay them and thus they will be left in a lurch.
Thus, you cannot stake claim to the delivery of the laptop before paying the service tax. You are hereby advised to pay “e-bay” the service tax first and then claim delivery of the laptop.
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