Exempts Service Tax on Interest on repayment of installment of Hire Purchase Agreements - 004/2006 - Service Tax

Service tax exemption on interest component of hire purchase installments reduces tax on interest while excluding other fees.

Exempts service tax on the portion of lease and hire purchase taxable service that represents interest in each installment - calculated as the difference between the installment paid and the principal component - while excluding non interest charges such as lease management, processing, documentation and administration fees; the exemption was later rescinded by a subsequent notification.