INSUBCONTINENT EXCLUSIVE:
Most goods and services barring a few goods such as fuel and liquor are covered under the GST regime.
The government has released some clarification on how banks, insurance companies,
stock brokers - essentially the financial sector - is taxed as per the prevailing Goods and Services (GST) rates
GST or the Goods and Services Tax, which came into effect on July 1 last year, is a uniform tax code imposed on the entire country
Most goods and services barring some goods such as fuel and liquor are covered under the GST regime
The latest document on GST seeks to clarify on how the tax is levied on delayed interest payments received by banks or say, the transfer of
loans from one bank to another.GST Clarifications: Ten Things You Should KnowIs interest on debt instruments exempt from GSTYes
As debt instruments such as debentures, bonds etc
are in the nature of loans, interest thereon will be exempt from GST.: "Petrol, Diesel Should Be Brought Under GST": Nitin Gadkari On Fuel
Price HikeIs GST required to be paid on additional interest charged in case of default in instalment payment by the customerYes
As per Section 15(2) of CGST Act, 2017, the value of supply includes, inter alia, interest for delayed payment of any consideration for any
Additional Interest charged for default in payment of instalment in respect of any supply, which is subject to GST, will be included in the
value of such supply and therefore would be liable to GST.Would charges for late payment of dues on credit card outstanding be chargeable to
The exemption from levy of GST on interest specifically excludes interest charged on outstanding credit card balances as per serial no
27 of the table of notification No
12/2017-Central Tax (Rate) dated 28th June, 2017, as amended.Whether tax is payable on interest charged by the banks on the outstanding
amount of gold (metal) loanYes
The Gold (Metal) Loan Scheme is a means of financing
The jewellers can purchase gold (metal) from the Banks on outright basis on payment of the price
The gold (metal) loan only provides an option to the jeweller to avail a loan and pay for gold (metal) at a future date
For this facility, the jeweller pays interest to the bank
The grant of loan and levy of interest is dependent on the purchase of gold, and therefore, part of the same transaction or facility;
therefore the interest, which is the consideration, will not be exempt as per provisions of section 15(2)(d) of the CGST Act, 2017.Will GST
be charged in transactions, where loan of one bank is taken over by another bankYes
GST will be chargeable on any transaction processing fees levied for such takeover of loans, but not on the interest component (as interest
is exempted).Whether GST will be levied on interchange fees on card settlement fees paid/shared by banksFees charged for card settlement is
a consideration which is part of a separate transaction between the banks which are parties to this transaction and shall be liable to GST
This is a B2B supply and credit of this transaction is available.In the case of group insurance policies, a Master Policy is issued; the
beneficiaries of the Master Policy may be located in more than one State
In such cases, what will be the place of supply of servicesIn the case of issuance of master / group policy to a registered person where the
premium charged is a single premium and not segregated based on the beneficiaries of the insurance policies, the place of supply for such
policy will be the location of the registered person paying the premium.Is GST leviable on interest/ delayed payment charges charged to
clients for debit for settlement obligations/ margin trading facilityAny interest/ delayed payment charges charged for delay in payment of
brokerage amount/settlement obligations/margin trading facility shall be leviable to GST.Whether GST will be levied on the exit-load on
Exit load in the form of a fee (whether or not as a fixed percentage of the investment) is liable to GST
Even if the exit load is in the form of units in the fund, it may be concluded that the consideration received in money was later converted
to net asset value (NAV) units
NAV is the value of an entity's assets minus the value of its liabilities
Exit load is a fee or an amount charged from an investor for exiting or leaving a scheme or the company as an investor.What is the
leviability of GST on securitization transactions undertaken by banksSecuritized assets are in the nature of securities and hence not liable
However, if some service charges or service fees or documentation fees or broking charges or such like fees or charges are charged, the same
would be a consideration for provision of services related to securitization and chargeable to GST.
