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TMI BlogClarification on place of supply applicable for custodial services provided by banks to Foreign Portfolio InvestorsX X X X Extracts X X X X X X X X Extracts X X X X ..... Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, Government of India, New Delhi has issued the above referred Circular. For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017). A copy of the above referred Circular is attached herewith as Annexure. Difficulty, if any, in implementation of this Circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to as CGST Act ), hereby clarifies the issue as under: Issue Clarification Whether the activity of providing Custodial Services by banks or financial institutions to FPIs will be treated as services provided to 'account holder' under Section 13(8)(a) of the IGST Act, 2017? Further, how the place of supply of the said services shall be determined? According to the Securities and Exchange Board of India (Custodian of Securities) Regulations 1996, Custodial Services in relation to securities means safekeeping of securities of a client and providing services incidental thereto, and includes- maintaining accounts of securities of a client; collecting the benefits or rights accruing to the client in respect of securities; keeping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 13 of IGST Act, Place of Supply of services supplied by banking company or a financial institution or a non-banking company to account holders shall be the location of the supplier of services. As per Explanation (a) of Section 13(8) of IGST Act, account means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account . It is mentioned that the provisions similar to above provisions under IGST Act existed during the Service Tax regime. The place of provision of service under Service Tax was governed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or financial institution to an account holder (holder of a deposit account bearing interest), in the ordinary course of business:- i) financial leasing services including equipment leasing and hire purchase; ii) merchant banking services; iii) Securities and foreign exchange (forex) broking, and purchase or sale of foreign currency, including money changing; iv) asset management including portfolio management, all forms of fund management, pension fund management, custodial, depository and trust services In the case of any service which does not qualify as a service provide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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