9911796707
TMI BlogTAXABILITY OF RECOVERY AGENT’S SERVICESX X X X Extracts X X X X X X X X Extracts X X X X ..... TAXABILITY OF RECOVERY AGENT’S SERVICES X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of Recovery Agent Recovery agent has not been defined but it would cover recovery agents or enforcement agencies under Securities and Reconstruction of Financial Assets and Enforcement of Security Act, 2002. Under this Act, and rules made thereunder, banks and other financial institutions appoint recovery agents. For the purpose of service tax, recovery shall be of any sums due to the servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce receiver and nothing else (asset or other property). To recover means to find or regain possession of, regain control of, regain or secure by any of a legal process, to get again. Recovery means the action of regaining or securing money lost or spent by means of a legal process or subsequent profits, debts recovery. Recovery means a thing secured by a process of law, the actual possession of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny thing, or its value, by judgment of a legal tribunal, the obtaining of a thing as a result of an action brought for the purpose. Taxable Service Section 65(105)(zzzl) defines taxable service as under -- Taxable service means services provided to a banking company or a financial institution including a non-banking financial company or any other body corporate or a firm, by any person, in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to recovery of any sums due to such banking company or financial institution, including a non-banking financial company, or any other body corporate or a firm, in any manner. The services provided for recovery of any sums due to a commercial or business entity are covered as taxable service. The taxable services could be provided to any of the following - (a) a banking company (b) a finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial institution (c) a non-banking financial company (NBFC) (d) any body corporate, or (e) a firm To be a taxable service, following ingredients should be satisfied -- (a) the activity should result in provision of service. (b) service provider i.e., recovery agent can be any person. (c) the service should be provided to specified persons only i.e., bank, financial institution, NBFC, body c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate or firms. (d) service provided or to be provided should be in relation to recovery of any sums due to such persons. (e) service may be provided in any manner by recovery agent. The services provided to an individual or person or HUF are not taxable services. The services of recovery agent should be for recovery of any sums due to such service receiver and it appears that recovery of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets or property or goods is not covered but such assets if offered as security against any sums due shall be covered under taxable services. For example, recovery of a vehicle or machinery which has been financed by way of a loan or hire purchase would be a taxable service but recovery of a stolen vehicle or machinery does not fall under the definition. The taxable service can be provided in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner. CBEC has vide Circular No. 334/4/2006-TRU, dated 28-2-2006 clarified as under -- "Services provided for recovery of any sums due to a commercial or business entity are covered under this category. Under Securities and Reconstruction of Financial Assets and Enforcement of Security Act, 2002 and the relevant rules made thereunder, banks and other financial institutions appoint recovery age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts."
Person Liable
Recovery agency providing recovery agent's services shall be person liable and treated as an assessee for service tax purposes.
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