Hi,
This is with regards to Car Loan which I have taken from Kotak Mahindra Prime Limited.
I want to repay the loan & hence I called up Kotak Customer Care Number. The CSR told me that I have to pay pre-payment charges which are 5.52% on the pending amount. But when I checked the attached schedule/contract, the pre-payment charges mentioned in the schedule are 5% only. On sending a mail to [email protected] I got a reply that there is a servce tax of 10.30% on the pre-payment charges i.e. 5% hence the total comes to 5.52%.
I have contract copy in which no where it is mentioned that KMPL will charge service tax @10.30%. It is mentioned that pre payment charges will be 5% (there is no star mark as "Condition Apply" as well as nowhere in the Schedule it is mentioned). The point here is that the Service Tax is being charged only on the services rendered by the service provider. When a borrower prepays a loan, the service provider does not render any service to the borrower. The borrower approaches the service provider and offer to prepay the loan, the service provider charges prepayment charges as per agreement or as per negotiation, and receives prepayment of loan. Therefore, there is no service rendered by service provider. When a charge is not for a service, the charge cannot be subject to service tax.
I have been doing follow-up since 26APR10 & there is no reply to any of mail. Finally I got a call on 03MAY10 from KMPL & the CSR told me that she has given a request to your Chennai office for retrieval of Loan Agreement documents. Post that there is no reply from KMPL. I have already provided the schedule copy which has the a column of prepayment charges, then what's the use of retrieving the documents.
I wanted to clear the loan on 01st of this month cause KMPL will charge me Rs. 72.00 as a per day interest. Please note that I am not going to pay Rs. 72.00 which KMPL charges per day from the date of installment till the date of pre-payment. The delay is from KMPL's end & why should I suffer for that.
I have send 8 mails @ [email protected], Nikhil. [email protected], Vikrant. [email protected], but there is no courtesy shown by KMPL by sending a holding mail to the customer.
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