GST on assignment or sale of  secured or unsecured debts : CBIC Clarify

By | June 4, 2018
(Last Updated On: June 4, 2018)

Whether assignment or sale of  secured or unsecured debts is liable to GST?

Section 2(52) of the CGST Act, 2017 defines ‘goods’ to mean every kind of  movable property other than money and securities but includes actionable claim.

Schedule III of the CGST Act, 2017 lists activities or transactions which shall be treated neither as a supply of goods nor a supply of services and actionable claims other than lottery, betting and gambling are included in the said Schedule. Thus, only actionable claims in respect of lottery, betting and gambling would be taxable under GST.

Further, where sale, transfer or assignment of debts falls within the purview of actionable claims, the same would not be subject to GST

Further, any charges collected in the course of transfer or assignment of a debt  would be chargeable to GST, being in the nature of consideration for supply of services.

Would sale, purchase, acquisition or  assignment of a secured debt constitute a transaction in money?

Sale, purchase, acquisition or assignment of a secured debt does not constitute  a transaction in money; it is in the nature of a derivative and hence a security.

Q 40 and 41 of GST FAQs on Financial Services Sector published by CBIC

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