Interest on FD, Goods and Services Tax - GST

[Kaustubh Karandikar]

Whether interest income on fixed deposits with bank, is an exempted service and to be included in turnover limit for carrying out statutory audit under GST? Further, if it is an exempted service, whether proportionate ITC will be required to be reversed?

Posts / Replies

[SHARAD ANADA]

Pl refer 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 a non-banking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances; and
(c) the value of supply of services by way of transportation of goods by a vessel from the customs station of clearance in India to a place outside India.

[KASTURI SETHI]

Dear Sir,

I support the views of Sh.Sharad Anada Ji. In this context, I suggest to peruse all the replies in respect of Issue ID 114819 dated 2.4.19.

[DR.MARIAPPAN GOVINDARAJAN]

In my opinion, the interest will not be taken for aggregate turn over. You are receiving the service and not providing service. Therefore no ITC is required to be reversed.