Applicability of Service tax on Over due Interest Received from Customers, Service Tax

[Abraham Wilson]

Sir,

Recovery of Over due Interest comes under Service tax Net? Please give your opinions on this issue with relevant Staturoty Reference.

Posts / Replies

[Pradeep Khatri]

No service tax will be applicable on interest.  Please check the Negative list, Taxation of Servcies :- An Education Guide, and Mega Notification in this regard.

[Abraham Wilson]

Sir

Thanks for your reply.

As per Sec.66D(n)(i) - Services by way of Extending Loans in under the Negative List.

But Shall we taken Delayed Payment Interest as a Loan given to Customer? Is It Right?

Please give your inputs.

[Pradeep Khatri]

Kindly refer Rule 6 of the Valuation Rule :- Interest for delayed payment of any consideration for the sale of goods or provision of service has been specifically excluded.

[Abraham Wilson]

Thank You Sir