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But when the counter-reformation is known by most people only by what it opposes, it becomes necessary to clarify what it was that it opposes.
Luther may have been an imperfect messenger, but I was always taught that one of his primary concerns was the sale of indulgences.

indulgence: a pardon for certain types of sin that was sold by the Catholic Church in the late medieval period.
The sale of indulgences motivated Martin Luther to post the "95 Theses."

We can agree that at least on THIS point he was correct, right?

Or, is there a Biblical foundation for this practice?

The Catholic church did not oppose his condemnation of the sale of indulgences. In fact, it cracked down on them. What’s questionnable is how widespread the practice was.

To correct your definition, an indulgence is an act one does for the remission on the temporary effects of sin on one’s soul. In other words, indulgences ensure you spend less time in purgatory. Once, they were offered for warriors in the defense of civilization against the Muslims. Today, they are typically granted for pilgrimages and prayers. They must be done with a contrite heart and a firm purpose of amendment for the sin that has been committed. Therefore, what Luther alleged was always contrary to Catholic doctrine: that people were being told that they could go ahead and sin, so long as they donated to the war. In essence, they were paying for a license to sin.

Clearly anyone with such money should have been educated well enough to have realized this would not be kosher, but it’s quite possible such sales did take place; rationalization can easily trump a conscience. And ordinary priests had no authority to grant indulgences. Nonetheless, the counter-reformation prohibited the practice of accepting money as an indulgence, to prevent such corruption, even though the biblical examples of remitting sins through charity were typically done with money.

However, Luther moved far beyond the sale of indulgences. He removed from the bible the book of Maccabees, wherein returning warriors achieved the remission of the sins of their fallen comrades through using the war booty to rebuild the Temple of Jerusalem. (This act is recalled in the Feast of the Dedication, celebrating the indwelling of God within the Temple, which takes place on the 25th of the month most closely approximating December.)

He moved to oppose the very notion of purgatory, removing the books of 1 Peter, Hebrews, Revelation, and portions of Daniel, because he realized the Council of Worms had convinced him that these books referred to purgatory. The New Testament books were eventually restored to the Lutheran canon; he could not, however, convince English or Swiss reformers to do such violence to the New Testament. But he did convince them to remove seven books from the Old Testament, based on misquoting St. Jerome.