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interest on loan between companies

Rajagopalan (EXECUTIVE FINANCE) (56 Points)

02 January 2008

02.01.2008

Inter corporate Loan paid from One company to another through agreement. For payment of interest monthly/quarterly whether debit note to be raised for the same. Also pl clarify whether service tax is applicable for the interest payments.The above companies are group companies.Pl clarify

S.Rajagopalan

HSI AUTOMOTIVES

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Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 02 January 2008

Interest is payable as per agareement between the parties ........may be monthly/q/annual . There is no law for a particular periodicity , it is governed by the agreement. Debit notes are to be raised as per the agreement. no sevice tax on interest payemtn