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.