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TMI BlogClarification regarding taxability of supply of securities under Securities Lending Scheme, 1997X X X X Extracts X X X X X X X X Extracts X X X X ..... of supply of securities under Securities Lending Scheme, 1997. Trade has requested clarification on 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 facilitating lending and borrowing of securities. Under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities 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 under the guidelines/scheme through whom the lender will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting or arranging transactions in securities; 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 WBGST Act. Therefore, a transaction in securities which involves disposal of securities is not a supply in GST and hence not taxable. 4.1 The exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, the activities of the intermediaries facilitating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST payments already made. 5.2 With effect from 1st October, 2019, the borrower of securities shall be liable to discharge GST as per Sl. No 16 of Notification No. 1701-F.T. [22/2019-CTR] dated 30.09.2019 under reverse charge mechanism (RCM). The nature of GST to be paid shall be IGST under RCM. 6. Difficulty, if any, in implementation of this circular may be brought to the notice of the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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