My company is a Pvt Ltd Co., dealing in sales & distribution of confectionery items (FMCG). So, we sold 200 cartons to our Super Stockist e.g. M/s. XYZ, then he will further sell those 200 ctns to his 20 distributors, this is called primary sales. Secondary sales is when distributors sell to Retailers.

Super stockist has his own sales man to liquidate the goods and we pay him 6000/- p.m. as service charge for secondary sales of only our brand.

But if achieves the sales target of 100000/- we have to pay him incentive @ 2.5% i.e. 2500/-, so total amt payable is 6000+2500=8500/- which we cannot pay him as service charge. Because as per tax law, we cannot pay service charge over 1 lac annually.

Please give alternative options how to pay him?