Service tax on interest

Arvind Sharma (ACA) (1432 Points)

01 February 2013  

Hello Everyone,

I was reading Terms & Conditions of a Bank for Credit Card... I found that Service Tax will be levied on Interest Charges on late payment.


Is it valid..?? I mean, interest on late payment is of a penal nature, that means there is no service at all, but a penalty imposition. So, when there is no service, then how can service tax be levid..??


Members, plz clerify

Reply awaited..