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2018 (5) TMI 809 - AAR - GSTExemption from GST - amount charged as interest - Whether an amount charged as interest on transaction based short term loan given by the Del Credere Agent (DCA) to buyers of material is exempt from tax in terms of the N/N. 12/2017-Central Tax (Rate) dated 28.06.2017? - Held that: - the extension of loan by the applicant (DCA) to the customers is a transaction separate from the transaction of supply of goods by the principal to the customers against consideration wherein the applicant (DCA) also gets the commission from the principal - the interest received by the applicant is consideration towards loan extended to the customers and such interest is not towards the payment of consideration for supply of goods by the principal to the customers, which is a separate transaction. As per Sl. No. 27 of the table to N/N. 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) is exempt from payment of Goods and Services Tax - As in the transaction of extension of loan by the applicant, the consideration is received by way of interest, the same is covered by Sl. No. 27 of the table to N/N. 12/2017-Central Tax (Rate) dated 28.06.2017, and hence exempted from payment of Goods and Services Tax. Ruling:- Service provided by M/s. Shreenath Polyplast Pvt. Ltd. by way of extending short term loans in so far as the consideration is represented by way of interest, is covered under Sl. No. 27 of the N/N. 12/2017-Central Tax (Rate) dated 28.06.2017 and N/N. 12/2017-State Tax (Rate) dated 30.06.2017, and hence exempt from payment of Goods and Services Tax.
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