TaxTMI 
TaxTMI 
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?
Interest on FD
20 Apr 2019 
3 Replies 
16880 Views Asked by
Interest on fixed deposits excluded from aggregate turnover; no reversal of input tax credit required for recipients.
Rule 43 Explanation 1 excludes from the aggregate value of exempt supplies services by way of accepting deposits or extending loans or advances insofar as the consideration is interest or discount, except for banking companies and financial institutions; accordingly, interest on fixed deposits received by a non-bank taxpayer is not included in aggregate turnover for statutory audit thresholds and does not trigger reversal of proportionate input tax credit. (AI Summary)
Rule 43 Explanation 1 excludes from the aggregate value of exempt supplies services by way of accepting deposits or extending loans or advances insofar as the consideration is interest or discount, except for banking companies and financial institutions; accordingly, interest on fixed deposits received by a non-bank taxpayer is not included in aggregate turnover for statutory audit thresholds and does not trigger reversal of proportionate input tax credit. (AI Summary)