GST liability on banking services: banks are service providers and must account for tax on service charges. In BF/BC arrangements under RBI guidelines, the banking company is the service provider and must pay GST on the entire service charge or fee charged to customers, as BF/BCs are prohibited from directly charging customers and transactions must be reflected in bank books. Exemption for services related to accounts in a rural area branch requires the services to fall under Heading 9971 and relate to a branch classified as rural per RBI guidelines; the bank's RBI-based classification should be accepted for exemption eligibility.
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 banking services: banks are service providers and must account for tax on service charges.
In BF/BC arrangements under RBI guidelines, the banking company is the service provider and must pay GST on the entire service charge or fee charged to customers, as BF/BCs are prohibited from directly charging customers and transactions must be reflected in bank books. Exemption for services related to accounts in a rural area branch requires the services to fall under Heading 9971 and relate to a branch classified as rural per RBI guidelines; the bank's RBI-based classification should be accepted for exemption eligibility.
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