Applicability of s. tax on h.p. interest for individual
This query is : Open
Sushant Mahajan
(Querist)
17 October 2013
If assessee is an individual and engaged in the business of financing purchase of goods on Hire Purchase, will Service Tax provisions apply on interest received in this?
Please reply.
Please reply.
Ajay Mishra
(Expert)
17 October 2013
Hi
Generally, the Individual giving/helping to someone amount of money for purchasing and then thereon charged interested is not governed by any law and It is prohibited. However you can help somebody by monetary way with mutual consent but you can not legalize.
Because if you are going to do such kind of services, then you will take firstly permission of RBI.
So as per my understanding it is also not covered under service tax.
Generally, the Individual giving/helping to someone amount of money for purchasing and then thereon charged interested is not governed by any law and It is prohibited. However you can help somebody by monetary way with mutual consent but you can not legalize.
Because if you are going to do such kind of services, then you will take firstly permission of RBI.
So as per my understanding it is also not covered under service tax.
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Sushant Mahajan
(Querist)
17 October 2013
Sir, the individual has been giving such services on regular basis for purchase of scooters, cars, etc and has duly been filing the Income Tax return for 15 years.
So, according to me, there is no point of illegality in this. Also, there is no permission required from RBI as such?
Its a pure case of being a 3rd party to the sale of goods between Seller and buyer by providing finance to the buyer on Hire Purchase Basis.
So, according to me, there is no point of illegality in this. Also, there is no permission required from RBI as such?
Its a pure case of being a 3rd party to the sale of goods between Seller and buyer by providing finance to the buyer on Hire Purchase Basis.
Ajay Mishra
(Expert)
17 October 2013
I will suggest you to check whether Hire purchase business is permissible to Individual or not. I think it is permissible only to entity registered under Law of India.
Please confirm the same.
Please confirm the same.
Sushant Mahajan
(Querist)
17 October 2013
Sir please refer
https://www.rbi.org.in/scripts/FAQView.aspx?Id=71
Q 35
https://www.rbi.org.in/scripts/FAQView.aspx?Id=71
Q 35
Ajay Mishra
(Expert)
17 October 2013
It is talking to deposit under an scheme or arrangement.
If you think, you can do so it is up to you. As per my understanding, i will say no.
You can take other views.
If you think, you can do so it is up to you. As per my understanding, i will say no.
You can take other views.
Sushant Mahajan
(Querist)
17 October 2013
okay Sir!
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