Service tax on commitment charges

Pucki (Querist) 09 February 2012 This query is : Resolved

Dear Sir/madam,

Commitment Charges is levied on Sanctioned but unutilized portion of Loan amount. Loan can be overdaft , term loan , CC (Overdraft nature), etc . Is thus commitment charges laible to service tax??
If yes , then on all sorts of unutilised loan portion???

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Devajyoti Barman (Expert) 09 February 2012
Sorry, we do not reply vague, commercial, academic or repetitive queries.

prabhakar singh (Expert) 09 February 2012
Sorry, we do not reply vague, commercial, academic or repetitive queries.

Raj Kumar Makkad (Expert) 09 February 2012
No scope for discussion over academic issues in this section.

C. P. CHUGH (Expert) 10 February 2012
While Sanctioning a Loan, Banks Creates an obligation upon themselves to spare the sanctioned amount to be utilised at the discretion of borrower and for the purpose they are right in charging a committment charge. Once a charge has been charged and collected that will be subject to levy of Service tax as usual.

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