Loan form Directors

Dear Ankit,

Your right. Nidhi ji plz check definition of "banking and financial services” under service tax act.

Dear Jaideep,

Mr. Sajay ji is right as its a general business of NBFC to provide the loan so according to me get exempted under sec. 297 (but strictly complied with sec. 297 conditions i.e. interest rate)

Other views are solicited.

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Thanks to all for participating in discussion.

Said loan treated as Inter-Corporate Deposit...............having common director between two companies (Lender and borrower) please ensure that section 295 is not violated ...................

regards

manivanann

Manivannan, Sir

Thanks for your valuable comment.

In this case loan is provided by private company which is exempt under section 295(2)(a)(i)

Regards

Section 297 is not applicable in the instant case.  Taking loan from a company having common directors is outside the purview of this section.

As regards treating of loan as a service, providing of loans by a banking company may amount to service but Section 297(2)(c)  specifically excludes such transactions from the scope of this section. Loans provided by non-banking institutions/ individuals will not be considered as providing service.  If the lending company is a private company, Section 295 is not applicable.  However if the lending company is a public company having common directors the applicability of Section 295(1)(c)(d)(e) needs to be checked.

Is Sec 297 & 295 apply to company prospectivly or retraspectively?

Prospectively.