Service tax on commitment charges paid to opic
This query is : Resolved
22 February 2014
Our Client, a private limited company based in India has taken loan from Overseas Private Investment Corporation (OPIC), an independent US Finance agency and paid commitment charges and other charges to OPIC only.
Whether commitment charges paid attracts Service Tax, if yes under which Rule/Section.
In our opinion Place of Provision of Services Rule 9, if Service Provider ie Bank or Financial Institution or NBFC is outside India, Service Tax is not chargeable, provided he must be a Account Holder and definition of Accounts says " An Account bearing interest to depositor". While our Assessee is not depositor, he is a borrower.
Whether commitment charges paid attracts Service Tax, if yes under which Rule/Section.
In our opinion Place of Provision of Services Rule 9, if Service Provider ie Bank or Financial Institution or NBFC is outside India, Service Tax is not chargeable, provided he must be a Account Holder and definition of Accounts says " An Account bearing interest to depositor". While our Assessee is not depositor, he is a borrower.
25 February 2014
If i understood correctly, the term 'commitment charges' is nothing but 'commision'or 'bank charges'.
Place of provision of service is meant to calrify the jurisdiction to find out the tax liability. Rule 9 of said Rule which you quoted only talks about the services provided by the banks etc to the acocunt holders and in such cases the place of provision is that of service provider. If such a service provider is outside india, then the liability is upon the receiver of servcie. I your case Rule 9 is not applicable as you are not an account holder.
For you Rule 3 will be applicable which says that place of provision is location of recipient of service , i.e. you, and hence falls under the jursidiction of Finace Act 1994.(please see the "Taxation of Service:An Education Guide"}
Since the servcie provider is out side india it will be termed as a import of service and the recipient is liable to pay the service tax under the RCM.(see Entry 10 of Notificatin 30/2012.
Regards
Place of provision of service is meant to calrify the jurisdiction to find out the tax liability. Rule 9 of said Rule which you quoted only talks about the services provided by the banks etc to the acocunt holders and in such cases the place of provision is that of service provider. If such a service provider is outside india, then the liability is upon the receiver of servcie. I your case Rule 9 is not applicable as you are not an account holder.
For you Rule 3 will be applicable which says that place of provision is location of recipient of service , i.e. you, and hence falls under the jursidiction of Finace Act 1994.(please see the "Taxation of Service:An Education Guide"}
Since the servcie provider is out side india it will be termed as a import of service and the recipient is liable to pay the service tax under the RCM.(see Entry 10 of Notificatin 30/2012.
Regards
01 March 2014
Dear Saju ji Thank you so much for reply
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- ADVANCE PAYMENT OF ADVOCATE
- TDS on Consultancy- Non DTAA
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Depreciation of fixed assets- coop housing society in mumbai
- Management System (IMS)
- REGARDING ANNUAL RETURNS FILLINGS OF A COMPANY INCORPORATED ON 28.03.2025
- TDS Return Q1 FY 2026-27
- Query – TDS on purchase of land from NRI under Income-tax Act, 2025
- UNWANTED CREDIT BALANCE OF GST AS PER BOOKS
- DIN reactivation
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
