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Commitment charges

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Querist : Anonymous

Querist : Anonymous (Querist)

09 February 2012
Is service tax payable on commitment charges? Commitment charges refer to charges made on unutilsed portion of sanctioned loan

PUNEET GOYAL

PUNEET GOYAL (Expert)
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09 February 2012 It appears that commitment charges are paid for utilizing lending services provided by bank. Section 65 (12) talks about banking and other financial services. The said section specified some services in other financial services which are appear to be indicative list not the exhaustive list. It includes lending and other services provided by bank.

To be on safer side one should collect service tax and deposit the same. Alternatively one may seek clarification by writing letter to concerned range superintendence about the taxability of same.

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