CGTMSE/(44)/3218                                                              September 10 , 2013



All the SME / Priority Sector Lending Heads, Head Office of Member Lending Institutions


Circular No. 67 / 2013-14

Madam / Dear Sir,



CGTMSE - Annual Guarantee Fee / Service Fee - Payment of Service Tax


            As you are aware, CGTMSE has been collecting annual guarantee fee / annual service fee from Member Lending Institutions (MLIs) for extending credit guarantee to the eligible borrowal accounts sanctioned by MLIs. CGTMSE is liable to pay service tax @ 12.36% on annual guarantee fee/ service fee being collected from various MLIs with effect from July 01, 2012 onwards. Accordingly, CGTMSE has since remitted service tax arrears @ 12.36% from July 01, 2012 to July 31, 2013 and also for August 2013.  The service tax so remitted is recoverable from the MLIs. 


In view of the above, all the MLIs are required to pay service tax (at the rate of 12.36%) in respect of its borrowal accounts sanctioned by them and obtained credit guarantee from CGTMSE with effect from July 01, 2012 onwards (for guarantee fee, ASF and AGF [w.e.f.01.01.2013]).  In this regard CGTMSE would be sending demand notice to all MLIs for making payment of service tax from July 01, 2012 to August 31, 2013.  As regard to guarantees being extended from September 01, 2013 onwards, CGTSME would be generating a composite demand, inclusive of service tax, together with Guarantee Fee / Annual Grantee Fee / Annual Service Fee as applicable. The MLIs are required to make the total payment as indicated in the demand notice. Please note any short payment will tantamount to discontinuation of guarantee. The details of CGTMSE registration are given below:


i)                    Pan No.AAATC2613D

ii)                   Service Tax Regn No.AAATC2613DSD001

iii)                 Category of Service: Other Taxable Service - Other than 119 listed.


All the MLIs are requested to bring the contents of this circular to the notice of all their staff members and arrange to pay service tax also along with the annual guarantee fee / service fee.


            Thanking you,


Yours faithfully,



(S.S. Bakshee)

General Manager