GST on interest income on loan

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..... GST on interest income on loan
Query (Issue) Started By: - Kaustubh Karandikar Dated:- 6-8-2023 Last Reply Date:- 11-8-2023 Goods and Services Tax - GST
Got 5 Replies
GST
XYZ Pvt. Ltd. and PQR Pvt. Ltd. are not related. XYZ had given loan to PQR and charging interest on the same. In my opinion as per entry no. 27 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 service .....

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..... s 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) are exempt. If we paid interest on loan or earned some interest income on loans or deposits, then that interest is exempt. Therefore XYZ is not required to pay GST on the interest income. However, will be required to p .....

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..... roportionately reverse the ITC on the common services. Views of the experts please. Reply By KASTURI SETHI: The Reply: Dear Sir, Pl. read detailed replies against Issue ID 114819 dated 2.4.19. Reply By Padmanathan Kollengode: The Reply: Common credit reversal under rule 42 and 43 is not required as such interest income will be excluded from the aggregate value of exempt supply. Pls see Expla .....

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..... nation 1 to Rule 43:- Explanation 1:-For the purposes of rule 42 and this rule, it is hereby clarified that the aggregate value of exempt supplies shall exclude:- (b) the value of services by way of accepting deposits, extending loans or advances in so far as the consideration is represented by way of interest or discount, except in case of a banking company or a financial institution including .....

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..... a non-banking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances; and Reply By Amit Agrawal: The Reply: I concur with the above views of Shri Padmanathan Ji. Reply By Ganeshan Kalyani: The Reply: Sri Kasturi Sir's reply in the issue id cited is very clear. Only when an activity is termed as a supply it can be further assessed as regar .....

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..... d it is taxable or exempt or non Gst supply . Reply By Kaustubh Karandikar: The Reply: Thank all the experts for your guidance.
Discussion Forum - Knowledge Sharing .....

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