This blog provides a comprehensive tabular overview of the GST treatment of various services commonly rendered by banks.
| Sl. No. | Nature of Service | Remarks about Taxability |
|---|---|---|
| 1 | Assignment or Sale of Debts | Not chargeable – falls under actionable claims, excluded under Schedule III of CGST Act. Also exempt if considered as sale of going concern. |
| 2 | Bank Guarantee Commission Charges | Taxable |
| 3 | Bill Discounting | Interest component exempt; commission, fees, brokerage, documentation charges taxable |
| 4 | Interest and charges on credit card delays | Taxable |
| 5 | Charges for Demand Draft | Taxable |
| 6 | Loan Documentation Charges | Taxable |
| 7 | Forward Contract in Currencies | If settled by actual delivery – GST on commission. If net settlement – not chargeable (securities). |
| 8 | Future Contracts | Not chargeable (financial derivatives fall under securities). Commission/documentation charges taxable. |
| 9 | Income from Commercial Paper/Certificate of Deposit | Exempt (interest income) |
| 10 | Inspection Charges | Taxable |
| 11 | Interest/Discount on Loans/Deposits | Exempt |
| 12 | Bank Statement Charges | Taxable, except for BSBD a/c under PMJDY |
| 13 | Issuance of Letter of Credit | Exempt (covered under “money”) |
| 14 | Ledger Folio Charges | Taxable |
| 15 | Loan Takeover Processing Fees | Taxable |
| 16 | Processing Fees on Loans | Taxable |
| 17 | Promissory Notes | Not chargeable (money); any commission/fees taxable |
| 18 | Sale of Derivatives | Not chargeable (securities); any commission/fees taxable |
| 19 | Security Receipts under SARFAESI Act | Exempt (falls under securities) |
| 20 | Services to RBI | Interest exempt; other charges taxable |
| 21 | Standing Instruction Charges | Taxable, except BSBD a/c under PMJDY |
| 22 | Stop Payment Charges | Taxable, except BSBD a/c under PMJDY |
| 23 | Services by Recovery Agent | Taxable under RCM |
| 24 | Services by Individual DSAs (non-corporate) | Taxable under RCM |
| 25 | Services by Business Facilitator/Correspondent to Banks (as per RBI circulars) | Exempt – Entry 39 of Notification 12/2017 |
| 26 | Services by Banks to BSBD accounts under PMJDY | Exempt – Notification 28/2018 |
| 27 | Business Facilitator/Correspondent services for rural branches | Exempt – Notification 12/2017 |
| 28 | Intermediary services to Business Facilitator/Correspondent | Exempt – Notification 12/2017 |
| 29 | Penal Interest on EMI Delays | Exempt – Circular No. 102/21/2019-GST |
| 30 | Foreclosure/Prepayment Charges | Taxable – Circular 10/2022 dated 03.08.2022 |
| 31 | Cheque Dishonour Penalty | Not taxable – Circular 178/10/2022-GST |
| 32 | Incentives from MeitY for Rupay/UPI | Not taxable – Circular 190/02/2023-GST (subsidy in nature) |
This compilation has been prepared with the help of publications by the Institute of Chartered Accountants of India (ICAI).
This blog is intended for general informational purposes only and does not constitute professional advice. Readers are advised to consult or refer to official notifications and circulars for specific guidance.