Whether service tax is applicable on interest income of non banking finance company? It is not specifically provided in the negative list? Is there any basic exemption limit available to nbfc?
Please refer notification no. or section.
Pawan Mittal (CA Final) (702 Points)
25 August 2012Whether service tax is applicable on interest income of non banking finance company? It is not specifically provided in the negative list? Is there any basic exemption limit available to nbfc?
Please refer notification no. or section.
Nemiraj Gathani
(CA Final)
(169 Points)
Replied 25 August 2012
Dept of Service tax has been sending notices to all the NBFC's regarding their registration with Service tax dept.
It is not in negative list for sure, but the matter is filled with ambiguity at the present moment.
NBFC who Lends the money is also covered under Service tax, so the income which is generated through it might also fall under service tax.
Pawan Mittal
(CA Final)
(702 Points)
Replied 25 August 2012
Thanx Nemiraj. Actually one of my relative has 3 nbfcs. He has also got notice from service tax department. What should he do now? I want a detailed answer.
Nemiraj Gathani
(CA Final)
(169 Points)
Replied 25 August 2012
It depends if your NBFC interest is not crossing the threshold limit of 9lacs, you do not require registration under Service tax, but if it crosses then you might be needing registration.
Pawan Mittal
(CA Final)
(702 Points)
Replied 26 August 2012
Service tax will be levied on the total interest earned or interest earned minus interest paid?
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