Cheque collection charges

Payment for the service received in any one or more manner i.e. currency, cheque, promissory note, letter of credit, draft, pay order, travellers cheque, money order, postal remittance and other similar instruments form part of the taxable value of the service. Some time, encashment of cheque, letter of credit etc involve some banking charges which are deducted by the bankers while giving credit for the instrument. In that case, whether the full value of the instrument is the consideration or the discounted/net value of the instrument is the consideration for the service is required to be analysed.