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GST on interest

Akhilesh (C.A.) (118 Points)

02 May 2019

if we give loan to our group company and charge Interest

does such interest is subject to gst?

if yes pls share notification or clarification or case study

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8 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178001 Points)
Replied 02 May 2019

Yes, in case GSTIN of both the units are different. Its treated as supply.

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manohar (CA Practice) (36 Points)
Replied 02 May 2019

Could you plz share sec or notification

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 02 May 2019

Its Exempted as per Entry no 27 , of Notification 12/2017 CT (r)

Vramamurthy (Coimbatore) (27 Points)
Replied 02 May 2019

sec 7(1)(a) defines the supply ......as per the sec supply of goods and or services done for any consideration treated as supply .......pls refer sec 7 ....for further reference

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Akhilesh (C.A.) (118 Points)
Replied 02 May 2019

so as per 7 (1)(a) gst is applicable

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Nishant shah (AUDIT ASSISTANT) (302 Points)
Replied 03 May 2019

GST is not applicable by virtue of of Exemption list which says that lending of money is a supply of services, but an exempt service in terms of Item 8 of Exemption list

P Murahari Kanuparthi (Manager - Commercial) (41 Points)
Replied 03 May 2019

If the transaction is a loan transaction, there is no question of GST on the recovery of principal lent, as the tax can only be on the consideration, and not for principal recovery. All earnings and charges other than interest or discount will be chargeable to GST. Lending of money is a supply of services, but an exempt service in terms of Item 8 of Exemption list.

Please refer M/s DELHI CHIT FUND ASSOCIATION VS UNION OF INDIA & ANR. W.P. (C) 4512/2012 dated 23-04-2013.

mayur (Commercial Analyst) (33 Points)
Replied 04 May 2019

Third Party Trade Sales/Purchase Bill Discounting/Refinance. Query: * GST HSN Code. * Rate Of SGST Guj/Maharashtra/Karnataka/ Rajesthan. * Rate Of CGST. * GST Registration Procedures For Individuals.