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.
Author Bio
Mam,
Intrest charged by individual is exempt from gst but for the purpose of taking the ITC it is taxable right?
we need to show in GSTR1 under exempted table?
and we need to add SAC code right?
For the purpose of reversal of Common ITC as per Rule 42 and 43, is the Exempted income from Bank Accounts and Bank Term Deposits to be considered as exempt outward supplies?
Yes Sir, Common ITC is to be reversed in terms Sec.17(2) of the CGST Act 2017
Hello,
If buyer pays interest for delayed payment of invoice value, does buyer required to pay Interest on RCM or any other way
Should i include this interest while calculating my aggregate turnover for registration under normal scheme because in case of composition scheme it does not have to be included while calculating aggregate turnover for registration as well as at the time of computing tax too.
I took loan on credit card. Now the bank is charging 18% GST on interest portion of each EMI.
Is GST on regular/ schedule interest is valid.
Yes, As the interest chargeable on Loan taken by way of credit card has been specifically excluded so bank is correct in charging interest on loan taken by way of credit card at the rate of 18%
IS money lender need to pay GST, if so how do you calculate it? what is the rate?
No money lender need not to charge GST on the money lended as the same is not covered under the scope of GST, however the Interest charged on the loan given is covered under GST but the same has been exempted from the charge of GST.
So practically no GST is chargeable on the Loan by lender
Can Interest recd from bank and other income treated as non gst supplies or exempt supply
The same is covered under GST so its GST leviable item, but covered under Exemption list
will interest received from TANGEDCO be Expemt under GST?
Mam,
I am getting charged GST on interest portion of the EMI from my credit card.
If interest is an income of the bank, charging GST is legal or not?
please email me on [email protected]
interest on unsecured loan are liable to gst
interest on unsecured loan are liable to gst
No. Covered under Exmeption list
Interest rate will be 18%.
Thank you. Vendor had sold goods ( taxable at 5% GST) to buyer. payment was delayed and interest was billed. What will be the rate of GST for the interest on delayed payment – 18% or 5% ? Please clarify.
It is taxable @5% since your goods is taxable @ 5%
Thank you. Vendor supplied goods (taxable GST 5%) and buyer delayed payments, interest for delayed payment is billed by vendor. What will be the GST rate for this interest for delayed payment – 18% or 5% ? Please clarify.