𝗖𝗘𝗦𝗧𝗔𝗧 𝗠𝘂𝗺𝗯𝗮𝗶 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗣𝗲𝗻𝗮𝗹 𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁 𝗮𝗻𝗱 𝗕𝗼𝘂𝗻𝗰𝗲 𝗖𝗵𝗮𝗿𝗴𝗲𝘀 𝗳𝗼𝗿 𝗡𝗕𝗙𝗖𝘀 📢 𝗧𝗵𝗲 𝗧𝗿𝗶𝗯𝘂𝗻𝗮𝗹 𝗿𝘂𝗹𝗲𝗱: "Penal interest and bounce charges collected are not 'consideration' for the service of 'tolerating an act' and are therefore not subject to service tax."

🔍 𝗙𝗮𝗰𝘁𝘀: Company: M/s Bajaj Finance Ltd. 𝗜𝘀𝘀𝘂𝗲: Are penal interest and bounce charges liable for service tax as consideration for tolerating delays and dishonored payments?

📝 𝗝𝘂𝗱𝗴𝗺𝗲𝗻𝘁: The Tribunal ruled that penal interest and bounce charges collected by NBFCs are regulated by RBI guidelines and are not "consideration" for services under "tolerating an act." Citing CBIC and prior Tribunal rulings, it held that these charges are exempt from service tax as they do not constitute a taxable service.

📜 𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗧𝗶𝘁𝗹𝗲: M/s Bajaj Finance Ltd. vs. Commissioner of Central Excise & GST, Pune-I 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗔𝗽𝗽𝗲𝗮𝗹 𝗡𝗼. 90043 of 2018 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 07 August 2023 📜 This ruling affirms that penal interest and bounce charges do not constitute taxable services and reinforces the exclusion of such charges from service tax liability under the Finance Act, 1994.