Now GST on Mutual Fund Exit Load & Credit Card Dues – The government informed that interest charged on outstanding credit card dues, finance lease and exit fees paid by mutual fund investors will be taxable under GST. Further, interest levied on loans are not taxed, any additional interest for delayed payment has also been kept out of GST.
The government also clarified that stock broking services given to non-residents like foreign portfolio investors will not count as exports and therefore are taxable.Exit load in the form of a fee on mutual funds is also taxable.
Free services provided by banks, such as withdrawals from ATMs and issuance of chequebooks to customers, will not be taxed under the goods and services tax (GST).
In case, customers are serviced from multiple branches, the location of the supplier of services will be the customer’s home branch. Banks and insurers also do not have to ascertain the place of consumption of the services they provide and can rely on the client’s GST identification number.
Banks can also issue a consolidated tax invoice to clients at the end of a month. Banks also need not register in states where they only have ATMs and no branches. These measures will reduce the compliance burden.
On stock broking services, the clarification said that interest or charges for delayed payment of brokerage amount or settlement obligations shall be taxable under GST.