Interest on service tax

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

19 August 2014 Respected Members,

IS there any service tax on interest paid on late fee

A govt agency is taking some fee from client but client is paying fee late.

The provision for fee of that agency is Fee+ ST @ 12.36%

Now should I pay ST on FEE + Interest or FEE+ST + Interest on fee.

i.e. is their any service tax on interest charge by service provider for for late payment of fee.

Thank you

Please reply

Sumit Grover

Sumit Grover (Expert)
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19 August 2014 No service is levied on interest on delayed payment of any consideration for the provision of services.
The same is excluded by virtue of rule 6(2)(iv) of Service tax(determination of value) rules, 2006

Querist : Anonymous

Querist : Anonymous (Querist)

19 August 2014 above rule cover interest on loan. I am not talking about interest on loan.

Case is HSIIDC is charging transfer fee for transferring industrial plot in favor transferee. But transferee has to apply for same, but as transferee has applied late so they are charging interest along with fee (interest from date of execution of sale deed)

Now is ST applicable on interest or only transfer fee

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Sumit Grover

Sumit Grover (Expert)
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19 August 2014 Dear Interest on loan is covered by section 66D(Negative list).
The rule 6(2)(iv) amended w.e.f. 1st july'12 vide notification no. 24/2012 deals with the case queries by you.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

20 August 2014 What about ST on Penalty component. Mean if there is also some penalty say transfer fee is ₹ 100 per sqm penalty ₹ 100 per sqm.

ST to be calculated on 100 or 200 (100+100)

Please tell