As per the definition of Goods given u/s 2(52) and definition of services given u/s 2(102) of CGST Act, 2017 money is excluded.
As per this if we provide loan to someone then this is not taxable since this is just a transaction in money. But the activities related to use of money is included in the definition of service.
According to this if we have provided loan to someone or made some deposits like recurring deposits, fixed deposits etc. then the interest income earned becomes taxable.
As per the entry no. 27 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services) are exempt.
If we paid interest on loan or earned some interest income on loans or deposits then that interest is exempt. But the following transactions are still taxable which are not in the form of interest but related to use of money:
1. Bank Charges
2. Loan Processing Fee
Further, I wish to clarify that following transactions are also taxable even though it is in the nature of interest:
1. Interest paid for using credit card services since this is specifically excluded from the exemption.
2. Interest for delayed payment of consideration should be included in the value of supply as per the provisions specified in Sec 15(2) of CGST Act, 2017.