GST ON GOLD LOAN INTEREST

[raja raja]

Dear Experts ,

Pl clarify GST applicability on gold loan interest

Thanks in advance

[Rajagopalan Ranganathan]

Sir,

Vide Sl. No.27 of Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 as amended rate of gst on "Services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services) is 'Nil'. 'Loans include gold loan also.

[KASTURI SETHI]

Gold loan is one of the types of loan.

[Ganeshan Kalyani]

Accordingly, no GST is applicable on interest on loan.

[Gunjan Shah]

Since it will be exempted service under GST. You will be required to reverse ITC. Unless already opted for 50% scheme under Rule 38.

AI Summary

Gold Loan Interest Exempt from GST per Notification 12/2017; ITC Reversal Required Unless Rule 38's 50% Scheme Opted. A query was raised regarding the applicability of GST on interest from gold loans. Experts clarified that, according to Notification No. 12/2017-Central Tax (Rate), services involving loans or advances, including gold loans, are exempt from GST if the consideration is represented by interest or discount. Therefore, no GST applies to gold loan interest. However, it was noted that this exemption requires the reversal of Input Tax Credit (ITC) unless the 50% scheme under Rule 38 has been opted for.