New Delhi, Aug. 24 -- The Supreme Court has held that referral charges received by automobile dealers from banks and insurance companies for facilitating vehicle loans and insurance policies are taxable as 'Business Auxiliary Service' under the Finance Act, 1994.

A bench of Justices J.B. Pardiwala and K. Vinod Chandran delivered the ruling in a case involving TVS Motor Company Ltd., which received referral charges from banks and insurers for connecting customers with vehicle loans and insurance policies.

Referral Charges Taxable

The court upheld the finding of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) that such charges are taxable under Section 65(105)(zzb) of the Finance Act, 1994.

The court noted that the deale...