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Is service tax is chargable on interest for layment payment

MAULIK GANDHI (Tax Assistant) (221 Points)

08 March 2014

Hey

I am Managing One Society its Monthly Maintaince is Exceeding Rs. 5000 & Its Annually Collection from Member is Also Exceeds Rs. 10 Lakh so that my client is liable to collect service tax from its member

But

My Question is that when Society Charges 21% P. A. Interest on Delay payment of Maintaince Charges

is that interest earned by society is subject to service tax collection??

Thanks in Advance

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4 Replies

Sunil Kumar (Indirect Taxation ) (1246 Points)
Replied 08 March 2014

There is no service tax on interest as this would cover under section 66 D I.e negative list and consequently no service tax on same

1 Like

Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 08 March 2014

The same is not taxable by virtue of Rule 6(2)(iv) of Service tax (determination of value) rules, 2006.

The instant case would not be covered by Section 66D(i.e. negative list), since that section covers interest in cases, wherein loans or advances are given.

1 Like

MAULIK GANDHI (Tax Assistant) (221 Points)
Replied 09 March 2014

Originally posted by : Sumit Grover
	The same is not taxable by virtue of Rule 6(2)(iv) of Service tax (determination of value) rules, 2006. The instant case would not be covered by Section 66D(i.e. negative list), since that section covers interest in cases, wherein loans or advances are given.

Thank you so much Sumit

MAULIK GANDHI (Tax Assistant) (221 Points)
Replied 09 March 2014

Originally posted by : Sunil Kumar
	There is no service tax on interest as this would cover under section 66 D I.e negative list and consequently no service tax on same

Thank you so much sunil for your response