The service tax authorities issued a show cause notice to SKS Microfinance last week for failing to recognise income from asset management transactions under a specific classification that attracts service tax.
The notice relates to assessment years 2007-08 to 2011-12 for Rs 34.24 crore. SKS was given 30 days to respond.
Meanwhile, the company said it registered a net loss of Rs 262 crore in the second quarter of the current financial year as against a net loss of Rs 384 crore registered in the same period a year ago. Net interest income declined 29.51% to Rs 43 crore from Rs 61 crore in the same period last year, while total income dipped from Rs 121.83 crore in September, 2011 to Rs 77.56 crore in September, 2012.
The company after its board meeting held in Hyderabad said, the Andhra Pradesh loan portfolio reduced to nil from a high of Rs 1,491 crore in October, 2010. It has made a provisioning of Rs 233.25 crore during the second quarter of the current fiscal . With this, as per RBI norms, SKS has fully provided for its exposure in AP.