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service tax on interest free loan

Service Tax - Started By: - pankaj jain - Dated:- 30-7-2016 Last Replied Date:- 12-9-2016 - I have taken as advance for our capital assets expansion for providing exempted service on interest free basis and the same is deducting from service charges receipts,which is an exempt service during f.y.2014-2015.Department view is that , since the service receiver has given the advance amount interest free the interest incurred @ 8.75% on ₹ 20000000/- or as the case may be , should be part of the .....

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rged by the service provider for calculating service tax payable. - Reply By KASTURI SETHI - The Reply = Sh.Pankaj Jain Ji, In this case, the amount of advance does not qualify as advance towards taxable service. Hence not taxable. However, if interest free advance influences the taxable value of service (taxable) directly or indirectly in any way, then notional interest on loan will form the part of taxable value. So it depends upon the terms and conditions of the agreement. Here does not appea .....

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. Activity 2. Service provider 3. Service recipient 4. Consideration. So as to determine the consideration is taxable or not the above points in the definition is to be taken into consideraion. The interest which is discussed by the department is not for the service provided by one person to another and it is not a consideration. Thanks. - Reply By KASTURI SETHI - The Reply = Sh.Ganeshan Kalyani Ji, I fully support your views.(100%). You have echoed my views. - Reply By Ganeshan Kalyani - The Re .....

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iance Communications by way of Inter Corporate Deposits for services to be rendered - Whether leviable to Service Tax, though such amount not mentioned in agreement and incurred by RCM before its demerger? The Supreme Court Bench comprising Hon ble Mr. Chief Justice H.L. Dattu and Hon ble Mr. Justice Arun Mishra on 5-11-2015 after condoning the delay issued notice in the Civil Appeal No. 13379 of 2015 (Civil Appeal Diary No. 35472 of 2015) filed by Commissioner of Service Tax, Mumbai-II against .....

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