GST liability on bank service charges applies where banks use business facilitators or correspondents, covering customer service fees. Where a banking company engages Business Facilitators or Business Correspondents under RBI guidelines, the banking company is the service provider and liable to pay GST on the entire value of service charges or fees charged to customers, whether or not those charges are collected via BF/BC. Exemption for services by BF/BC requires that such services fall under Heading 9971 and relate to accounts in branches classified as rural in accordance with RBI guidelines, with the bank's rural classification to be accepted.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
GST liability on bank service charges applies where banks use business facilitators or correspondents, covering customer service fees.
Where a banking company engages Business Facilitators or Business Correspondents under RBI guidelines, the banking company is the service provider and liable to pay GST on the entire value of service charges or fees charged to customers, whether or not those charges are collected via BF/BC. Exemption for services by BF/BC requires that such services fall under Heading 9971 and relate to accounts in branches classified as rural in accordance with RBI guidelines, with the bank's rural classification to be accepted.
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