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of <h1>GST Clarification: Loans Between Affiliates Exempt from Tax if Only Interest Charged; Fees Make Them Taxable Services.</h1> The circular clarifies the taxability of loans provided by an overseas affiliate to its Indian affiliate or between related persons under the GST framework. It states that while the act of granting loans is considered a supply under GST, services by way of extending loans where the consideration is only interest or discount are exempt from GST. However, if any additional fees such as processing or administrative charges are levied, these are considered as taxable services. The circular emphasizes that no GST applies if no such additional fees are charged beyond interest or discount.
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