Banks in a GST fix over RBI’s directive to levy penal charges
The ban on ‘penal interest’ on borrowers is posing a tax dilemma for banks. Banks fear that the Reserve Bank of India’s (RBI) directive to levy penalty only in the form of ‘penal charges’ as against the hitherto practice of imposing ‘penal interest’ would attract the goods and services tax (GST) on such levies.