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

GST exemption on loan interest: interest on gold loans is not taxable, but ITC reversal or partial ITC rules apply. Interest on gold loans is treated as interest on loans which is an exempted service attracting a nil GST rate; loans include gold loans and therefore interest on such loans is not subject to GST. Because this interest income is an exempt supply, the provider is required to reverse input tax credit attributable to exempt supplies unless the supplier has availed the alternative partial ITC mechanism (the 50% scheme under Rule 38).