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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 ..... oner Joint Commissioners Deputy Commissioners: Assistant Commissioners State Tax Officers Clarification regarding taxability of supply of securities under Securities Lending Scheme, 1997-reg. 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 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... security lending mechanism is depicted in the diagram below: - 2.2 In the above chart: (i) Lender is a person who deposits the securities 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 inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration is charged; Explanation.--For the removal of doubts, it is hereby clarified that the expression "services" includes facilitating 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 JGST Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST / SGST / UTGST treating the supply as an intra-state supply, such lenders shall not be required to pay IGST again in lieu of such GST 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. 22/2019-State Tax (Rate) dated 01.11.2019 under reverse charge mechanism (RCM). The nature of GST to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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