No service tax liability on foreclosure charges collected by banks and NBFCs on premature termination of loans
Last updated: 25 February 2023
Court :
CESTAT, Chennai
Brief :
The CESTAT, Chennai in M/s Sundaram Finance Ltd. [Service Tax Appeal No. 646 and 647 of 2012 dated February 22, 2023] has set aside the orders passed by the Revenue Department levying service tax on Foreclosure Charges ("FC") collected by the assessee. Held that, the FC collected by banks or Non-Banking Financial Company ("NBFC") on premature termination of loans cannot be subject to service tax under "Banking and Other Financial Services ("BOF Services") as defined under Section 65 (12) of the Finance Act, 1994 ("the Finance Act").
Citation :
Service Tax Appeal No. 646 and 647 of 2012 dated February 22, 2023
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Bimal Jain
Published in GST
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