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Itc on bank charges

Anitya ( ) (287 Points)

06 May 2019

Good Morning Members.

I would like to share a major problem in GST in banking. GST is applicable on various charges - ATM Fee, Cheque Book Charges, Cheque Return Charges, NEFT/RTGS Charges, Loan Processing Fee, Inspection Charges etc. But the banks are neither issuing invoices, nor giving GST credit to the customers. The GST charged by banks are not showing properly in the GSTR-2A of most of the taxpayers. What should be done in such cases. How to take ITC on the bank charges - should we take it or completely ignore them. Last date of taking ITC for 2017-18 is over and the last date of filing yearly GSTR-9 for 2017-18 is 30th June 2019.

I request members to share your views.

Thanks

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5 Replies

Asiya Begum (Chartered Accountant) (687 Points)
Replied 06 May 2019

We can draft a letter to the bank mentioning the bank charges in a month and the applicable GST on the same and get it signed by the bank officials. The same can be considered as eligible document for availing ITC.

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Anitya ( ) (287 Points)
Replied 06 May 2019

Thanks Asiya.

Will letter acknowledged by the bank manager will be sufficient in this case. Don't we need invoice for the same. What if we need to file purchase details along with invoice no. and date in a GSTR at a later date.

Asiya Begum (Chartered Accountant) (687 Points)
Replied 06 May 2019

Yes the same can be considered as a valid document to avail the credit. However, in future if the new returns come up (ie., Sahaj, Sugam), then the bank has to mandatorily upload the invoice as per the formats of new returns.

Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 06 May 2019

As per C.G.S.T Rule 24(2), Where the supplier of taxable service is an insurer or a banking company or a financial institution, including a non-banking financial company, the said supplier may issue a consolidated tax invoice or any other document in lieu thereof, by whatever name called [for the supply of services made during a month at the end of the month, whether issued or made available, physically or electronically whether or not serially numbered, and whether or not containing the address of the recipient of taxable service but containing other information as mentioned under rule 46.

Hence, bank may issue any document in lieu of invoice but it must contain all information (Except specified above like Name as "Tax invoice" and address of service recipient e.t.c.) required to be furnished as per rule.46 (Like GSTIN of recipient of service)

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