sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« GST - Goods and Services Tax »
 Is your builder passing on the benefit of lower GST to you?a
  GST Audit: All You Need to Know
 Special Deposit Scheme (SDS)-1975 Payment of interest for calendar year 2018
 Budget made ‘unreasonable demands’ on GST, but wasn’t a failure: Ex-CEA Arvind Subramanian
 Your neighbourhood sweet shop could become a restaurant to dodge GST
 Deadline for filing annual GST return extended to March 31
 GST enabler for boosting retirement savings
 Multiplex and theatre owners in Uttar Pradesh get relief under GST regime
 CAIT urges FM Arun Jaitley to extend last date for GST filing to March 2019
 Key points for first ever filing of GST Annual returns
 India Inc seeks more time for filing GST annual returns, audit reports

Government clarifies GST applicability on financial services
June, 04th 2018

Goods and services tax applies to exit loads charged by mutual funds, additional interest charged for default in payment of loan instalments and late payment charges levied by credit card companies, the government has said.

Securitisation, future contracts, derivatives and forward contracts in commodities, unless entailing actual delivery of commodities, will however not be liable to this tax which was introduced on July 1last year. The detailed clarifications for the financial services sector issued in the form of frequently asked questions (FAQs) seeks to address some pertinent issues relating to the industry such as levy of tax on free services. The FAQs issued late Saturday night cover banking, insurance and capital markets.

For banks, automated tellers machines or ATMs will not constitute place of business and will not trigger GST registration, the government said. In case services are provided by multiple branches to a customer, the branch where the account is opened will pay GST and other branches will be deemed to provide services to the main branch. In case of import of gold, integrated GST will apply once, on import, and not again when it is appropriated by banks.

Services provided by banks to the Reserve Bank of India will be taxable as these are not covered by any of the exemptions or excluded from the purview of GST. However, the repo rate or reverse repo rate are exempt from GST, as per the clarifications issued.

“These are the most comprehensive sectoral FAQs issued by the government and clarify most of the issues raised by the industry. It is very significant as globally as well the financial service sector is considered as most complex from GST standpoint,” said Pratik Jain, indirect tax leader, PwC.

In a clarification which has ramifications for foreign banks, management oversight or stewardship activities performed in relation to business operations by the head office of a bank to a branch in India will be considered a supply of services by the head office even when there is no consideration charged and face GST.

The government said banks can issue a consolidated statement or invoice to the customer at the end of the month, with the details of all the charges levied. Insurance policies issued to nonresidents are liable to GST where payment is made from non-resident accounts in Indian rupees, according to the FAQs.

“The issuance of detailed FAQs on taxability of various revenue streams, place of supply, procedural relaxations in registrations, nature of various documents to be issued, etc., would definitely provide alot of clarity to the banking industry and should result in adoption of standard practices within the industry,” said Harpreet Singh, partner, indirect taxes at KPMG.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Organic SEO Outsourcing Organic Search Engine Optimization Outsourcing Organic Website SEO Organic SEO India Website SEO India Organic Search Engine Optimization India Organic Internet SEO India Organic Web

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions