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TMI BlogClarification regarding taxability of supply of securities under Securities Lending Scheme, 1997.X X X X Extracts X X X X X X X X Extracts X X X X ..... e 07-11-2019 Subject: Clarification regarding taxability of supply of securities under Securities Lending Scheme, 1997. The circular seeks to clarify whether the supply of securities under Securities Lending Scheme, 1997 ("Scheme") by the lender is taxable under GST. 2. Securities and Exchange Board of India (SEBI) has prescribed the Securities Lending Scheme, 1997 for the purpose of facilitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt: (i) Lender is a person who deposits the securities registered in his name or in the name of any other person duly authorised on his behalf with an approved intermediary for the purpose of lending under the scheme. (ii) Borrower is a person who borrows the securities under the scheme through an approved intermediary. (iii) Approved intermediary is a person duly registered by the SEBI unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the expression "services" includes facilitating or arranging transactions insecurities; 4. Securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 are not covered in the definition of goods under section 2(52) and services under section 2(102) of the HGST Act. Therefore, a transaction in securities which involves disposal of securities is not a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held by him to a borrower and charges lending fee for the same from the borrower. The borrower of securities can further sell or buy these securities and is required to return the lended securities after stipulated period of time. The lending fee charged from the borrowers of securities has the character of consideration and this activity is taxable in GST since 01.07.2017. 4.4 Apart from above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an intra-state supply, such lenders shall not be required to pay IGST again in lieu of such GST payments already made. 5.2 With effect from 1st October, 2019, the borrower of securities shall be liable to discharge GST as per serial number 16 of Haryana Government, Excise and Taxation Department, notification No.89/GST-2, dated 01.10.2019 under reverse charge mechanism (RCM). The nature of GST ..... X X X X Extracts X X X X X X X X Extracts X X X X
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