Interest Tax applicable on finance charges from hire purchase of vehicles

CIT Vs. M/s. Kerala State Financial Enterprises Ltd. (Kerala High Court) The only legal issue that arises for consideration in this appeal is whether “finance charges” such as, interest received from hire purchase transaction, and other interest would attract tax on interest under the Interest Tax Act, 1974. The argument advanced for the Revenue is that, finance charges collected by the respondent for vehicle financing as well as other hire purchase is nothing, but “interest” attracting tax. Whereas, the respondent contended that hire purchase transactions are outside the scope of inte...