Service Tax Exemption on Seed Capital Assistance Scheme: 1% and 10% Charges Deemed as Loan Interest, Not Service Charges.

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....Levy of Service Tax - banking and other financial services - Seed Capital Assistance Scheme - Though the term used in ‘service charge’ but the underlying nature of the 1% and 10% is nothing but interest on the seed capital loan, extended to the entrepreneurs. Therefore the same is not liable to service tax. - AT....