Interest on FD

[Kaustubh Karandikar]

Whether interest income on fixed deposits with bank, is an exempted service and to be included in turnover limit for carrying out statutory audit under GST? Further, if it is an exempted service, whether proportionate ITC will be required to be reversed?

AI Summary

Interest Income from Fixed Deposits Exempt Under GST, Not Part of Turnover; No ITC Reversal Needed, Says Rule 43. A query was raised regarding whether interest income from fixed deposits should be considered an exempt service under GST and included in the turnover limit for statutory audits. Additionally, it questioned if proportionate Input Tax Credit (ITC) needs to be reversed if it is an exempt service. One response referenced Rule 43, stating that interest on deposits is excluded from the aggregate value of exempt supplies. Another response agreed with this view, suggesting reviewing related discussions. A third response opined that interest should not be included in aggregate turnover and no ITC reversal is necessary.