loan gurantee fee as a commission

[MITSUI PRIME ADVANCED]

Dear Sir,

we have taken one loan form jabic japan, in such cases we are paying loan guarantee fee commission to their parents company in such cases pl. advice us service Tax and TDS both are attract on transaction

pl. advice.

Thanks & Regards

Arjun Sachdeva

AI Summary

Reverse charge on loan guarantee fees applies when services are received in India; TDS may apply if characterised as interest.
Loan guarantee fees paid to foreign service providers are subject to service tax on the Indian service recipient under the reverse charge mechanism; if paid to domestic providers, the provider charges service tax. Such fees are treated as banking and financial services under the POPs Rules and Notification No. 30/2012 ST. Separately, these processing or guarantee charges may be characterised as interest, attracting TDS deduction obligations on payment.