A recent circular addressed the taxability of loans between ...

Clarification on GST Taxability for Loans Between Related Parties: Interest Exempt, Fees May Incur Tax.

June 27, 2024

Circulars GST

A recent circular addressed the taxability of loans between related parties or affiliates. The circular clarifies that providing loans between related parties constitutes a taxable supply under GST. However, services involving interest or discount on loans are fully exempt. Processing fees or administrative charges on loans may be subject to GST, but in cases where no such fees are charged, no GST applies. Fees charged by lenders to related parties beyond interest or discount are considered taxable. The circular emphasizes the distinction between loans provided by related parties and independent lenders, noting differences in processing requirements. It advises issuing trade notices to disseminate the circular's contents and invites feedback on implementation challenges.

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A recent circular addressed the taxability of loans between ...

Clarification on GST Taxability for Loans Between Related Parties: Interest Exempt, Fees May Incur Tax.

June 27, 2024

Circulars GST

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