Friday, March 30, 2012

CERSAI - Service Tax & TDS

Whether registration fees attract Service Tax and whether TDS is required to be deducted from the advance remittance by the HFCs.

The registration fees are payable as required under the Central Registry Rules 2011 framed in exercise of powers conferred on the Central Government under Section 23 read with Section 38 (2) (d) of the SARFAESI Act, 2002. The fees which is being collected by the Central Registry from the banks and financial institutions is an advance towards the fees to be paid to the Government for registration. When the particulars of mortgages are filed with the registry the fees will be debited to the advance already collected. In our views no TDS/ST is payable in respect of such payments which are charges payable to the Govt. The amount of advance is linked to registrations required to be filed by the Bank or Financial Institution. Once the Central Registry installs the Payment Gateway for payment of fees for registration there will be no requirement of payment of advance.

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