Dear all
anyone can let me know whether service tax credit can be allowed on interest charges by the bank on cash credit account ?
4 Replies
Chinmay
(Accounts Professional)
(356 Points)
Replied 24 January 2011
Dear Kamlesh,
Your bank charges assuming inclusive of Service Tax i.e.
If bank debited Rs.127/- as Bank Charges, then
=(127/110.3%) = 115.14 (Approx.)
so Rs.115/- is assessable value & balance amount treated as Service Tax Rs.12/-.
arnav
(student)
(78 Points)
Replied 25 January 2011
No credit will be allowed against Interest charges on CC account to the bank,
since the value of "interest" on loan or any type of advance is not determined as taxable while calculating service tax liability of the bank.
shrivardhan
(Audit Assistant)
(45 Points)
Replied 22 February 2011
For bank Industry ,it never charge Service Tax on Interest , therfore no Service Tax credit as per my opinion
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 23 February 2011
There is no service tax on interest. If bank has charged ST on interest, it is by mistake. Illegal tax may not qualify for cenvat credit.
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