Abatement - Financial leasing including hire purchase - Service Tax Practice Manual / Ready Reckoner - Service Tax

Sr. No. 1 Financial leasing including hire purchase W.e.f. 1.7.2012 Scope of abated service - Notification no 26/2012-ST dated 20.6.2012 From 1.4.2012 Services in relation to financial leasing including hire purchase. Effective Rate of tax : 10% of Service Tax prescribed u/s 66B Conditions : Nil Explanation: as appended to the Notification (i) The amount charged shall be an amount, forming or representing as interest, i.e. the difference between the installments paid towards repayment of the lease amount and the principal amount contained in such installments; (ii) the exemption shall not apply to an amount, other than an amount forming or representing as interest, charged by the service provider such as lease management fee, processing fee, documentation charges and administrative fee, which shall be added to the amount calculated in terms of (i) above.