TaxTMI 
TaxTMI 
DEAR SIR
One of my client is running a NBFC, he is having income from Interest from loan/ hypothecation transactions, does it chargeable to service tax under banking and financial services or not.
SERVICE TAX ON NBFC
20 May 2014 
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Interest income not treated as service, so not subject to service tax; non-interest NBFC receipts may be taxable.
Interest income from lending or hypothecation by a non-banking financial company is not treated as the provision of a service for service tax purposes and therefore is not subject to service tax; other receipts such as fees, commissions or ancillary non-interest incomes may constitute taxable financial services and should be assessed separately for service tax liability. (AI Summary)
Interest income from lending or hypothecation by a non-banking financial company is not treated as the provision of a service for service tax purposes and therefore is not subject to service tax; other receipts such as fees, commissions or ancillary non-interest incomes may constitute taxable financial services and should be assessed separately for service tax liability. (AI Summary)