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2018 (8) TMI 702 - AT - Service TaxBanking and Other Financial Services - dormant account charges - It appeared to the department that such charges would be required to be part of the gross amount of value of taxable service for purposes of discharging service tax liability - Held that:- There is no service being provided to the customer in the course of levying such charges. The customer in any case was not operating his account for quite some time, only for which reason the account has been declared dormant or inoperative by the bank. By levying “dormant account charges’ such account holders are not getting any additional services or benefits that they were not getting earlier. This being so, levy of such charges are nothing but a penalty imposed on such account holders for keeping their account inoperative. Banks need a constant rolling of money and deposits, and inoperative or dormant account will not help this purpose. The dormant account charges are therefore nothing but a charge in the nature of penalty. Appeal allowed - decided in favor of appellant.
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