GST Impact on Banks / Financial institutions

By | September 28, 2016
(Last Updated On: September 28, 2016)

GST impact on Banking and Financial institutions

Place of Supply provisions under GST and impact on Banking and Financial institutions

Presently, the place of provision of services provided by banking institutions or financial institution like NBFC, etc, to account holders is the location of the service provider. Hence, though the customer may be outside India he would be liable to pay Service tax under. The GST Law the place of supply of service for banks/NBFC, etc., would be

ItemPlace of Supply
Services are linked to the account of the receiverlocation of the service receiver on the records of service provider;
in other cases,location of service provider.

Where there is a concept of “intermediary services” as existing, however, the GST Law does not provide for anything specific under the place of supply provisions. Therefore, if banking and financial institutions, etc, would provide cross border intermediary services, for example, branch of a overseas bank providing services for trade finance transactions, the place of supply could be outside India under the present Law.

GST and impact on Banking and Financial institutions : Example : FAQs on GST  ( Place of Supply of Goods or Services)

Q 16. A person in Goa buys shares from a broker in Delhi on NSE (in Mumbai). What will be the place of supply?

Ans. The place of supply shall be the location of the recipient of services on the records of the supplier of services. So Goa shall be the place of supply.

Q 17. A person from Mumbai goes to Kullu-Manali and takes some services from ICICI Bank in Manali. What will be the place of supply?

Ans. If the service is not linked to the account of person, place of supply shall be Kullu i.e. the location of the supplier of services. However if the service is linked to the account of the person, the place of supply shall be Mumbai, the location of recipient on the records of the supplier.

Finance Lease and operating Lease

Under GST regime a finance lease is considered as supply of goods and an operating lease as a service whereas leasing of an asset outside India is liable to IGST.

ItemTreatment under GST
Finance leasesupply of goods
Operating leasesupply of Services
Leasing of an asset outside India.Liable to IGST
Actionable Claim (securities, i.e., NPA etc )Under GST “service” specifically includes actionable claim

Education Guide on Goods & Service Tax (GST)

S. No.Title of the Post
1.Goods and Services Tax (GST): An Overview
2 Levy of GST & Exemption from Tax
3.GST Registration
4.Meaning  and Scope of Supply
 5Time of Supply
6Valuation in GST
7.GST  Payment of Tax
8Electronic Commerce under Goods & Service Tax (GST)
9Job Work under Goods & Service Tax (GST)
10Input Tax Credit under Goods & Service Tax (GST)
11Concept of Input Service Distributor in Goods & Service Tax (GST)
12Returns Process and matching of Input Tax Credit under GST
13Assessment and Audit under GST
14Refund under GST
15Demands and Recovery under GST
16Appeals, Review and Revision in GST
17Advance Ruling in Goods and Service Tax (GST)
18Settlement Commission in Goods and Service Tax (GST)
19Inspection, Search, Seizure and Arrest under GST
20Offences, Penalty, Prosecution & Compounding in GST
21Integrated Goods & Service Tax (IGST) Act Overview
22.Place of Supply of Goods and Service under GST
23.Frontend Business Process on GST Portal
24.Transitional Provisions in Goods & Service Tax (GST)



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