Service tax on interest income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 September 2012 Dear All,

Kindly clarify regarding service tax Applicability on Interest Income on Loan provided by Micro Finance Company ( Public Limited Co.)

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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15 September 2012 No Service Tax is Not Applicable on Interest Income.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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15 September 2012 Agree with Mr. Ayush,
Services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount is covered by negative list.
Accordingly, no service tax on interest income.

Querist : Anonymous

Querist : Anonymous (Querist)

15 September 2012 thanks Ayush for u r reply but r u sure about it. because one of the CA told that it is applicable in case of Micro finance company on 10% of Interest Income earned by company

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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15 September 2012 Yes, Its Confirmed.
Even What I think is Interest Income Cant Be Taken into Service Tax Purview Since Practically Its Seem Not Possible.

Querist : Anonymous

Querist : Anonymous (Querist)

15 September 2012 Ayush & Amit

Thanks for sharing such valuable information.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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15 September 2012 How come interest be a service??
Interest is nothing but the time value of money.. there is no service provider...he is just giving the money and collecting it with interest.. who is the service receiver???
It is transaction in money and covered by negative list

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