Bank guarantee

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2013 when we take bank guarantee say for rs 7000000
do we need to pay that amount to bank.
but i have seen bank demands margin(security) money also charges processing fees,commission.

experts please reply it's urgent

Anand

Anand (Expert)
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30 April 2013 You need to have adequate funds in your bank account because, without that the bank will unable to guarantee on your behalf.
Banks normally charge a commission for providing bank guarantees and in some cases processing fees too. it is normal.

Querist : Anonymous

Querist : Anonymous (Querist)

01 May 2013 do we have to deduct tds on commission & processing fees charged by bank for bank guarantee.
Is service tax charged by bank on processing fees & can we take input of that service tax charged & if bank doesn't show that service tax is charged in the bank statement shall we assume that to be inclusive of service tax.
b
Because this has happened in my company, in the documents relating to bank guarantee its written processing fees -0.5%+st but in bank statement only 800000 is debited & in my cos. book J/E is
processing fees..........a/c
to bank.

please reply.
it's urgent.

Querist : Anonymous

Querist : Anonymous (Querist)

Anand

Anand (Expert)
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06 May 2013 no tds is to be deducted on the BG Commission or processing fees.
regarding service tax, i hope my professional colleagues will help.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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12 June 2013 Bank guarantee is procured from the ban against 100% deposit in FD a/c and for that bank charges commission @1%. You cannot deduct any tax on the account of commission paid to the bank as the bank debits the same to your account and bank is exempted from TDS

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