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TMI Blog2013 (11) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... t required to be included in the gross taxable value for calculating the service tax. Rate of service tax on EMI payment – Held that:- Following Art Leasing Ltd. Vs. Commissioner of C.EX., Cochin [2007 (6) TMI 217 - CESTAT, BANGALORE] - The Banking and Financial Services came under the service tax net w.e.f. 16.07.2001 - at that time, CBEC issued clarification to the effect that in respect of Hire Purchase Contracts entered prior to 16.07.2001 and installments of which were received after 16.07.2001, there is no Service tax liability - When the Hire Purchase contract is entered, the taxable event occurs - the demand of differential amount applying the higher rate, which came into effect from 14.05.2003, will not be applicable in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nking and Financial Services which also stands exempted under Notification No. 25/2004(ST) dt. 10/09/2004 and also as a result of insertion of clause-(vii) to Explanation-1 of sec 67 of the Finance Act, 1994. It was his case that as per Explanation-1 (viii) to sec. 67 of the Finance Act 1944 the gross amount charged by the service provider does not include interest on loans . He also relied upon CBEC Circular No. 80/10/2004-ST, dt. 17/09/2004 which specifically clarified that interest on loans is not to be included for gross valuation under Sec. 67. He further argued that as per Rule-6 (2) (iv) of the Service Tax (Determination of Value) Rules 2006 also interest on loans is not liable to service tax. That with effect from 15/09/2004 ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he services. 4.1 So far as charging of interest on loans/advances is concerned appellant has argued that as per the provisions of Explanation 1 (viii) to Sec. 67 of the Finance Act 1944, read with CBEC Circular No. 80/10/2004-ST dt. 17/09/2004, interest on loans is not required to be included in the gross value of the services provided during the period involved in the present appeal. On perusal of the relevant provisions we find it to be so. Therefore, on merits demand of service tax with respect to interest on loans is not required to be included in the gross taxable value for calculating the service tax, during the period involved in this appeal. 4.2 So far as applicability of rate of service tax on payment of instalment (EMI) is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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