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GST applicability on Interest Subvention receives from nationalized bank, Goods and Services Tax - GST |
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GST applicability on Interest Subvention receives from nationalized bank |
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Sir, Require a clarification whether the GST is applicable on interest subvention received from a bank for reducing the effective interest of Working capital loan (Packing credit facility). Any section or case laws supporting the above fact Also there is a clarification required that, since GST is not applicable for Interest on working capital loan, whether the subvention received for the same is applicable for GST Posts / Replies Showing Replies 1 to 5 of 5 Records Page: 1
Interest subvention is a subsidy and GST on subsidy is not applicable if granted by Central Govt. or Statement. See the definition of 'Consideration' under Section 2 (31) of CGST Act. In your case, it is taxable. Peruse the following decision of AAR:-
Sir, In our case subsidy is received from Bank as per RBI Scheme (interest equalization scheme) Since RBI comes under Central Government, whether we require to pay GST.
Bank is not fully Govt. body. It is Govt of India undertaking.
Dear Querist, You are right. RBI is fully Govt. All other banks are Govt.of India undertakings. Interest subvention is actually borne by Central Govt. Bank is only via medium (channel) through which you get interest subvention. Discussed the whole issue with retired Bank Officer. Since this subsidy is borne by Central Govt., GST is NOT applicable.
Thank you Sir for your valuable information Page: 1 Old Query - New Comments are closed. |
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