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TMI BlogClarification on place of supply applicable for custodial services provided by banks to Foreign Portfolio Investors.X X X X Extracts X X X X X X X X Extracts X X X X ..... y some field formations that the Place of Supply in case of custodial service‟ would be determined as per Section 13(8)(a) of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as IGST Act ), i.e. the location of the service provider (banks or financial institutions). 2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Commissioner, in exercise of his powers conferred by section 168 of the West Bengal Goods and Services Tax Act, 2017 (hereinafter referred to as WBGST Act ), hereby clarifies the issue as under: Issue Clarification Whether the activity of providing Custodial Services by banks or financial institutions to FPIs will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (e) units of real estate investment trusts, infrastructure investment trusts and units of Category III Alternative Investment Funds registered with the Board; (f) Indian Depository Receipts; (g) any debt securities or other instruments as permitted by the Reserve Bank of India for foreign portfolio investors to invest in from time to time; and (h) such other instruments as specified by the Board from time to time. Various banks enter into custodial agreements with the Foreign Portfolio Investors (FPIs) for the provision of such custodial services. The main activity carried out by banks as a custodian in relation to custodial services is maintaining account of the securities held by the FPIs. As per clause (a) of sub-section (8) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an account bearing interest to the depositor)? Answer: Following are examples of services that are provided by a banking company or financial institution to an account holder , in the ordinary course of business :- i) services linked to or requiring opening and operation of bank accounts such as lending, deposits, safe deposit locker etc; ii) transfer of money including telegraphic transfer, mail transfer, electronic transfer etc. Question:5.9.4 What are the services that are not provided by a banking company or financial institution to an account holder, in the ordinary course of business, and will consequently be covered under another Rule? Answer: Following are examples of services that are generally NOT provided by a banking company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by banks or financial institutions to FPIs are not to be treated as services provided to 'account holder' and therefore, the said services are not covered under Section 13(8)(a) of the IGST Act. Therefore, the place of supply of such services is not to be determined under Section 13(8)(a) of the IGST Act but has to be determined under the default provision i.e., sub-section (2) of section 13 of the IGST Act. 3. Difficulty, if any, in implementation of this Trade Circular may please be brought to the notice of the Commissioner. Sd/- (DEVI PRASAD KARANAM, IAS) Commissioner, State Tax West Bengal - Circular - Trade Notice - Public Notice - Instructions - Office orders Tax Management India - taxmanagementindia - taxmanagement - ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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