Service tax on Interest on Hypothecation, Service Tax

[satbir singh wahi]

A  NBFC is financing  Motorcycles , under hypothecation agreement , all income receipts are accounted as Interest income .Whether they are subject to service tax ?  As banks are exempt , so they should be.

Posts / Replies

[Pradeep Khatri]

Though Banks re exempted to pay the service tax on the Interest portion, but there is no such exemption available to Non Banking Finance Companies.  Please check the Negative list as well as Mega Exemption Notification in this regard before taking any option whether to pay or not the service tax?