GST on Collateralized Borrowing and Lending Obligations (CBLO) transactions : CBIC clarify

By | June 4, 2018
Print Friendly, PDF & Email
(Last Updated On: June 4, 2018)

What is the nature of income /  expenditure on Collateralized Borrowing and Lending Obligations (CBLO) transactions?

In CBLO transaction, the borrowing bank pays an amount as consideration to  the lending bank for funds provided by it for a short term. Such amount would qualify as ‘consideration represented by way of interest or discount’ and hence, would not be subject to GST [serial no. 27 of the table of notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017, as amended]. However, if any
charges or fees are levied for such transactions, the same would be a consideration and would be chargeable to GST.

Q 35 of GST FAQs on Financial Services Sector published by CBIC

Direct Taxes Ready Reckoner
Service Tax Ready Reckoner
Company Law Ready Reckoner
tax deduction at source

Leave a Reply

Your email address will not be published. Required fields are marked *