Clarification regarding taxability of supply of securities under Securities Lending Scheme. 1997

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..... Additional Commissioners/ Joint Commissioners/Deputy Commissioners/ Assistant Commissioner/State Tax Officers/ State Tax, Chhattisgarh (All) . Madam/Sir, Subject: Clarification regarding taxability of supply of securities under Securities Lending Scheme. 1997 - reg. A circular dated 11.10.2019 has been issued by CBIC regarding clarification on whether the supply of securities under Securities Lending Scheme, 19 .....

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..... f 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 deposit the securities for lending and the borrower will borrow the securities; 3. It may be noted for the purpose of GST Act, securities shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 [Section 2(101) of CGGST Act]. The definition of services as per Section 2(102) of the CGGST Act, is extracted as below: - .....

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..... ies as disposal of securities and therefore is not excluded from the definition of services. 4.3 The lender temporarily lends the securities held by him to a borrower and charges lending fee 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 lending and borrowing of securities for commission or fee are also taxable separately. 5 The supply of lending o .....

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