TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Successful Appeal: Fleet card income deemed as interest, exempt from service tax.</h1> <h3>IN RE: SUNDARAM FINANCE LIMITED, CHENNAI</h3> IN RE: SUNDARAM FINANCE LIMITED, CHENNAI - 2012 (27) S.T.R. 541 (Commr. Appl.) Issues:1. Whether the interest recovered from defaulters is liable for service tax under the category of 'credit card service'.Analysis:The case involved an appeal filed by a non-banking financial company against the Order-in-Original passed by the Additional Commissioner, LTU, Chennai. The dispute arose regarding the income received from the usage of fleet cards and whether it was liable to service tax under specific sections of the Finance Act, 1994. The department contended that the income was taxable under the category of 'Banking and other financial services' and later under 'Credit card, Debit card, or other payment card service.'The appellant raised several grounds of appeal, arguing that the income derived from extending credit facility under the fleet card scheme should not be subject to service tax. They emphasized that the charges collected were akin to interest on loans, exempt from service tax. The appellant also highlighted distinctions between fleet cards and credit cards, emphasizing the nature of transactions and the absence of monetary benefits or commitments from oil companies in the case of fleet cards.During the proceedings, the appellant presented their case, supported by legal arguments and reliance on relevant case laws. The Commissioner analyzed the nature of credit cards and fleet cards, noting the differences in usage and implementation. The Commissioner concluded that the income earned by the appellant from the fleet card scheme was essentially interest on loans, which was explicitly excluded from service tax liability as per relevant circulars and notifications.Referring to legal precedents and circulars, the Commissioner held that as long as the income received was in the nature of interest on loans, there was no service tax liability. The Commissioner cited specific provisions and notifications exempting interest on loans from service tax. Relying on previous court decisions, the Commissioner determined that the income from the fleet card scheme was not liable to service tax. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.
TaxTMI 