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Relevant GST law
Whether interest charged on account of providing financial assistance in the form of loan is liable to GST ?
Frequently Asked Questions on Banking, Insurance and Stock Brokers Sector Updated as on 27.12.2018
42. If any service charges or administrative charges or entry charges are recovered in addition to interest on a loan, advance or a deposit, would such charges be also a part of the exemption?
No. The services of loans, advances or deposits are exempt in so far as the consideration is represented by way of interest or discount. Any charges or amounts collected over and above the interest or discount would represent taxable consideration and hence liable to GST.
