Indian Tax regime is one of the most complex GST in the world, resulting in confusion and queries arising, as to how GST takes a toll on the financial sector. Even today, very few have an idea of how your personal finances are affected under the new Tax regime.
The Government is making it clear by posting information and some detailed FAQs which answers most of the questions under the new GST. GST related information is given for various sectors including finance and insurance which covers some of relevant issues covering industry specific tax liability.
In this article, lets see some of the clarifications given by the Government:
GST levied on exit loads charged by mutual funds
Exit load in the form of fee is applicable under GST. Also, if the exit load is in the form of units in the fund, it’s assumed that money received can later be converted into NAV units.
Loan from one bank being taken over by another bank?
GST is levied upon any transaction processing fees for transfer or takeover of loans from one bank to another, however GST is not applicable on interest.
Late Payment and Outstanding dues on Credit Cards
GST is levied on dues and delayed payments. Any exception from GST applicable on interest explicitly excludes the interest charged on the outstanding dues of credit card balances as per Serial no. 27 of the table of notification No. 12/2017-Central Tax (Rate) dated 28th June 2017, as amended.
According to the FAQs, ATMS (automated teller’s machines) will not constitute place of business and doesn’t require GST registration, states the Government. If multiple branches provide service to a customer, in that case, the branch location where the account has been opened is GST liable, while the rest of the branches are responsible to provide services to the main branch. For import of valuables such as gold, integrated GST will be applicable for once, and not again when disbursed by banks.
Insurance policies that are circulate to the NRI is GST accountable in case of the payment done by the non-resident accounts in Indian Rupees according to FAQs.
As per the information given in the FAQs, securitization, future contracts, derivatives and forward contracts in commodities, unless entailing actual delivery of commodities, are not susceptible to Tax under GST.
It’s need of the hour to evaluate the new implications on the current complex issues arising out of the GST regime. The Government must try to resolve and streamline the existing complications rather than making it further complex. GST is implemented to bring One Tax system and to accelerate the Indian economy. However, Government must play a key role in framing the GST regime and resolve the concerns of several industries that GST liable at the earliest. GST being the biggest Indirect tax reform for our nation must be a win-win situation for everyone.
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