[Resolved] Standard Chartered Bank — SERVICE TAX ON INTEREST COMPONENT ON PERSONAL LOAN AGAINST CREDIT CARD

[Resolved] Standard Chartered Bank — SERVICE TAX ON INTEREST COMPONENT ON PERSONAL LOAN AGAINST CREDIT CARD

A ANANTHARAMAN RAMANATHAN from Pune, Maharashtra

I am holding Standard Chartered credit card and have availed personal loan against said credit card. The Bank collected Processing charges for the service provided by them in sanctioning personal loan to me and has levied service tax on it. The Bank has been levying Service tax on the interest portion of the loan As per Govt of India notification in July 2001, service tax is leviable only in respect of transactions which are done using a credit card and not on all the value of charges on credit card. Further, among other things, the list of charges which attracts service tax include interest on delayed payment and interest on revolving credit and not normal interest on any type of loan (not necessarily availed through credit cards). As per Standard Chartered Bank, all charges levied on credit cards are liable for service tax. Please clarify whether service tax is levibale on the interest portion of personal loan availed against credit cards. Was this information helpful? No (0) Yes (0)
Aug 14, 2020 Complaint marked as Resolved
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Comments

K.RADHAKRISHNAN

from Edakkulam, Kerala

I'm also facing similar problem with HDFC Bank. A clarification in this matter may kindly be mailed to me.

D.Krishnamurthy

from Bengaluru, Karnataka

As per service tax rule (Determination of value)-2006, Rule 6(2)a, Interest on lonas are excluded from Service tax. I suspect half of the banks collect this service tax sepertely and may or may not deposit the same to Serice tax directorate. it has to be investicated. I have been writing letters to Directorate of Service tax at Mumbai and they also concurrred with my opinion. But ICICI with whom I have taken loan are giving vague answers. However I am repeatedly appraising and raising the level and I may go leagally in a short time. But It is English which is the biggest draw back with ICICI. They use deferent terminologies at different incidences and not willing to meet people face to face so that things can be sorted out. Many a tax consultant whom I have approached did not want to put their effort in to it fully. I do not know why?

makwadekar1680

from Pune, Maharashtra

Chamdi bacho attitude of all banks whether it is Standard Chartered, State Bank of India, CITI or HDFC. And RBI has form cell saying customer first But i doubt. You send them mail they will say they don't want to say anything as it is lending Bank who is going to decide what are the charges to be levied
That means RBI accept that they are just governing body.. Strange...

sumit c jain

from Mumbai, Maharashtra

dear all,

have you all received any responce for the same.

pls help me with same as i m stuck in same problem now.

prakyroy

from New Delhi, Delhi