Case Law Details
In re Rajkot Nagarik Sahakari Bank Ltd. (GST AAAR Gujarat)
The recent case of Rajkot Nagarik Sahakari Bank Ltd. (Appellant) under the GST regime brings attention to the complex issue of taxation on incentives provided under the Atma Nirbhar Gujarat Sahay Yojna. The Gujarat Authority for Advance Ruling (GAAR) made a ruling that the incentive received by the Appellant is liable to GST. This article will delve into the key aspects of the case and analyze the implications of the ruling.
Background of the Case:
The Appellant filed an appeal under Section 100 of the Central Goods and Services Tax Act, 2017 (CGST Act) and the Gujarat Goods and Services Tax Act, 2017 (GGST Act) against the GAAR ruling. The case revolves around the incentives provided by the Gujarat State Government under the Atma Nirbhar Gujarat Sahay Yojna, wherein cooperative banks and credit societies were to offer loans at a subsidized interest rate of 8% to small traders, middle-class businessmen, artisans, and the working class.
The incentive, granted based on the performance of banks in disbursing these loans, was in addition to the 6% interest borne by the Gujarat State Government. The Appellant sought a ruling on whether this incentive should be considered a subsidy and be exempt from GST.
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