My company get a Plant & Machinery on own name, now sold the plant to other firm on hire purchase contract & repayment decide 8Lac PM & interest charged 1%PM, know how to my firm applicable for service tax regarding above style deal.
15 April 2012
Hey in your case Service Tax will be applicable as renting of immovable property
and no need to include interest component
Querist :
Anonymous
Querist :
Anonymous
(Querist)
15 April 2012
But my company not made any type of renting invoice company received repayment amount (Due amount in installment basis), so how can we say it’s renting system, hire purchase as a financial transaction and service tax applicable only on processing fee/documentation charges (recovered at the time of entering into the agreement) and on the finance/interest charges (recovered in equated monthly installments) and not on the principal amount, so please suggest better for me.
CAclubindia
