Commitment charges on working capitalism
This query is : Resolved
31 December 2015
bank has charged penal interest@0.5% for non utilisation of 60%of sanctioned working capital .we have utilizied 38 % in septamber quarter say 60 -38 = 22%under utilisation but bank has charged commitment charges on 100-38 =62% it is unethical .please advice correct method of calculating commitment charges ( as per RBI Guide line). and as commentment charges are part of interest so i think service tax is not applicable on this part please cleaify
02 January 2016
Commitment charges are not part of interest hence liable for service tax. Check the agreement terms on commitment charges.
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