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2018 (6) TMI 253 - AT - Service TaxInterest accrued on lending by Financial Company - exempted services - The department has sought to recover an amount of 8%/6% of the value of interest which was considered as exempted services in terms of N/N. 29/2004-ST dated 22-9-2004 - Held that:- The notification exempts only part of value of taxable service that is interest. The main service provided by the appellant is “banking and other financial service” which includes one of the service i.e. lending. The lending per se is taxable but part of value of the lending service to the extend of interest is exempted therefore service is taxable only part of the value is exempted vide notification No. 29/2004-ST dated 22-9-2004 - In this fact entire basis of Revenue that interest being exempted service therefore Rule 6(3)(ii) is applicable is absolutely incorrect. In the present case lending service which is one of the banking and other financial service is taxable only part of the value of such service which represent interest is only exempted therefore Rule 6(3) has no application. The demand of 8%/6% raised by the adjudicating authority is not sustainable - appeal allowed - decided in favor of appellant.
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