Andhra Pradesh Clarifies GST on Securities Lending: Lending Fee Taxable, Reverse Charge from October 2019.

The circular issued by the Andhra Pradesh Commercial Taxes Department clarifies the taxability of securities lending under the Securities Lending Scheme, 1997. It states that while the lending of securities is not considered a transaction in securities, the lending fee charged is treated as consideration and is taxable under GST since July 1, 2017. The supply of lending securities is classified under heading 997119 with an 18% GST rate. Initially, lenders paid GST under forward charge, but from October 1, 2019, the borrower is liable to pay GST under the reverse charge mechanism. Intermediaries facilitating these transactions are also subject to GST.

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