Banking Service - Exemption to Excluded value?

1232 views 3 replies
Dear Friends,

New NTF - 04/2006 - ST gives exemption as under

hereby exempts the taxable service, specified in sub-clause (zm) of clause (105) of section 65 of the Finance Act, that is to say the financial leasing services including equipment leasing and hire-purchase as defined in item (i) of sub-clause (a) of clause (12) of section 65 of the Finance Act, provided or to be provided to any person, from so much of the service tax leviable thereon under section 66 of the said Finance Act, as is equivalent to the service tax calculated on ninety per cent. of an amount, forming or representing as interest, i.e. the difference between the installment paid towards repayment of the lease amount and the principal amount contained in such installment paid.

But note that clause  (viii) of Explanation 1 to Sec - 67 specifically provides that 'interest on loan' will not form part of the value of taxable services.

Further, New Draft Rule also provides same exclusion. Then Why this NTF 4/2006, provides exemption upto 90% of interest which is already excluded from taxable value?

Regards.
Replies (3)
Dear Chauhan Anand,

Sec 67 is replaced by a new sec. 67. In the new sec 67, there is no such exclusion given for interest on loans.

TONY. M.P. , THRISSUR,   KERALA
94470 80631
trc_mptony @ sancharnet.in

Dear Mr. Tony,

Pl. refer Draft Valuation Rules, in which all exclusions of section 67 is reproduced  just by "Cut & Paste".

So there is still exclusion of interest on loan.

Regards.
Dear Chauhan,

What you said is right.

This notification cannot be justified.

Regards,
TONY.M.P.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 18 June 2026
Article Assistance

RB KESHRI & CO.

Mumbai

CA Inter

View Details
Company
19 June 2026
Accounts Executive

Getfive Advisors Pvt. Ltd.

Ahmedabad

CA Inter

View Details
Company
Featured 24 June 2026
HEAD - AUDIT AND TAXATION

A R JADHAV AND ASSOCIATES

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 30 June 2026
Article Assistant or Paid Assistant

VIKAS VERMA & CO

New Delhi

Others

View Details
Company
22 June 2026
Finance Manager- Chartered Accountant

Triveni Turbine Limited

Bengaluru

CA

View Details
Company
24 June 2026
Senior Account (VA Client Operations)

Karbon Business

Bengaluru

CA Inter

View Details
Company
ARTICLESHIP 24 June 2026
CA Article Trainee

Rahul Dang & Associates

Pune

CA Inter

View Details
Company
24 June 2026
Chartered Accountant

CA Darshita Shah & Co

Nadiad

CA

View Details