Service Tax Levy on Reinstatement Interest for Lapsed Insurance Policies Governed by Contractual Terms, Not Reclassified as Fees.

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....Levy of Service tax - re-instatement interest collected on lapsed insurance policy - The manner in which interest has to be paid is governed by the terms of contract agreed between the parties. The department cannot, therefore, urge that since uniform rate of interest has not been levied, the amount collected would not partake the character of “interest” but would be in the nature of administrative/processing fee. - AT....