Service Tax Liability on ECB Loan Gurantee Fee paid to Parient company, Service Tax

[MITSUI PRIME]

Dear Sir,

We have taken loan from Japan for set up Manufacturing  unit in India, Load provider is Co-operation society, Japan and our Parient Company provided Loan guarantee to co-operation Society, on Indian company Behalf, and Indian company paid Loan guarantee Commission to Parent  company , Japan, in this case subsidiary company i.e. Indian company liable for service tax .

Please provide your valuable advice. 

Regards

Arjun Sachdeva

Posts / Replies

[Pradeep Khatri]

Yes, it is payable under Reverse Charge Mechanism w.e.f. 01-07-2012 and up-to 30-06-2012 Section 66A was applicable.