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2015 (8) TMI 797 - AT - Service TaxWaiver of pre deposit - demand of service tax on differential interest - It was taken note of by the Revenue that appellants grant loans to the borrowers and build portfolio of loan. These portfolios of loans are sold to other financial institutions by assigning the entire asset. - As per this deed, SKS has two roles namely the 'Assignor' and the 'Servicer' and HDFC is the 'Assignee'. - Microfinance lending activities Held that:- when the assignee appoints a different person as a servicer if service tax is payable, question arises why there should be a difference if the assignee himself acts as a servicer. We do not find any logic in taking a view that in such a situation assignee is not liable to pay tax. In the normal course when a loan is assigned, the consideration is paid by the assignee and that is the end. In this case the assignor collects the principal and interest and since they have received a loan from the bank equal to the amount or more than the amount of portfolio transferred, the assignee or the servicer pays the principal and the interest charged by the bank to the bank. In case where the servicer is a different person, the appellant will be simply paying back the loan with interest charged by the bank and will have nothing to do with the rural women who have received the loan. - appellant does not have a prima facie case on merit - Partial stay granted.
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