From : vijaychand2007@rediffmail.com Dear Sir, HDFC Bank is charging me service tax on interest of personal loan (availed under cr. card) EMIs being paid every month.Loan Interest is not any kind of service,whether bank has a right to charge service tax on loan interest.I am working in Dubai & not seen physical copies of monthly statement & thus presumed EMI may be right.Recently bank billed outstation cheque collection fee for no reason & asked my wife to scan & email the latest statement. I was surprised & shocked that bank has levied sevice tax @12.36% & Cess on loan interest. I got a written reply from bank as "We take this opportunity to clarify that as per current Government of India guidelines, service tax as applicable will be levied on the prescribed fees, interest and other charges as applicable from time to time. Service tax will be applied on each of the applicable items and will be reflected in the Cardmember's statement. We would like to inform you that the service tax has been recently revised from 12.24% to 12.36% effective from 11th May'07. Hence, all EMIs that are being billed currently carry the difference in the service tax as 'ADD CESS' and the same is payable by you.". I would like to know whether bank is right in charging. I am having similar kind of cr. card loan from Citibank and paying EMI every month,but Citibank has never charged such service tax. Could you please clarify on this matter. Would request you to reply your feedback on my email id :