I recently availed a Home Loan from a Nationalised Bank. I feel that they have charged me a lot of charges which were indeed not applicable. I was not in a position to resist it, since I had paid some processing fee upfrot and spent a lot of time in the process.
Before considering my loan application I was asked to deposite 50% of the processing charges(no mention of service tax). But at the time of actual disbursement they have charged documentation charges (in their brochure this charge is mentioned but they told me that since I am applying for an under construction property from a builder whom the Bank has a tie up with - I will not have to pay documentation charges). Apart from this, they have charged under mentioned amounts which were mentioned nowhere in the terms and conditions:
CIBIL Charges Rs.50/-
Stamp paper charges Rs.150/-
PAMAC Charges Rs.800/- (Customer point verification agency charges).
Above all they have charged Service Tax 10.3% for the entire amount including the initial processing fee I have paid.
There were some more issues with the bank in the whole business. So I have made a detailed complaint. After persistent pursuing, I was returned some amount as charity without any reasonable reply.
Recently I have talked to an Officer in SBI who was dealing with loans. He categorically told me that no bank charges Service Tax on processing fee i.e. if service tax is payable on processing fee, the Banks does not charge it separately. He further told me that apart from the cost of stamp paper (if the Bank has purchased it), no other charges can be levied from me. I am also at a loss as to how the Bank can charge Service Tax on expenditure they have actually incurred?
Please help me in solving the puzzle. At least some of the experienced guys tell me as to whether service tax is payable separately for the processing charges?