Loan given to credit-card holders will not be different from normal loan and will not attract Goods and Services Tax (GST), Calcutta High Court has ruled.
The issue here was whether loan given to a credit-card holder should be treated as part of credit-card services or like any other loan provided by a financial institution. This issue is critical as a notification, dated June 28, 2017, exempts loan transactions from GST, but interest charged for credit-card services are not exempted. Earlier, a single judge bench had ruled that interest charged on loan given to credit-card holder is exigible to GST. Later, an appeal was filed.
The appellant was offered a loan of Rs. 6.50 lakh being “increased pay lite loan” for 12 months with interest at the rate of 13 per cent per annum payable in 12 equated monthly instalments. The loan amount was disbursed by the bank by an account payee cheque. The entire loan amount along with interest was repaid along with GST.
Read more at : businessline
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