IN BANKING JEWEL LOAN - APPRAISER FEE RELATED

[VEL MURUGAN]

SIR

IM WORKING AS A GOLD APPRAISER IN TAMILNADU STATE APEX CO-OPERATIVE BANK

MY WORK IS COMMISSION BASIS

BANK COLLECT APPRAISER CHARGES FROM CUSTOMERS.

THAT CHARGES( APPRAISER FEE) IS TAXABLE UNDER GST OR NOT

FOR THE LAST FEW YEARS THEY COLLECT GST.

THAT IS CORRECT OR NOT

ANOTHER ? ON MY SERVICE IS TAXABLE UNDER GST OR NOT

BANK COLLECT ₹ 100( INCLUDE GST) FROM CUSTOMER THEN MY SHARE 80% BANK SHARE 20%

BUT I RECEIVED ONLY 67% . THIS IS CORRECT OR NOT

PLEASE REPLY FOR MY PROBLEM

THANK YOU SIR

G VELMURUGAN

[KASTURI SETHI]

The bank is not on right track. Suppose you are 'A' (Service Provider), Bank is service receiver as 'B' and ultimate consumer is 'C'. C is B's customer and not A's. A has nothing to do with C. C is your customer's customer. B is playing the role of intermediary.

Since A is supplying service to B, A is to collect GST from B and deposit with the Govt. It is A's duty and here the situation reverse. Why B is making payment to you after deduction of GST ? It is not TDS or TCS. An amount of ₹ 80/- includes GST and you get ₹ 67/- after deduction of GST of ₹ 13/- (@18%). Your service is taxable. You can avail threshold exemption of ₹ 20 lakhs.

Also go through the following case law pertaining to Service Tax regime.

2008 (12) S.T.R. 376 (Tri. - Chennai) = 2008 (7) TMI 147 - CESTAT, CHENNAI PUDUKOTTAI DISTRICT CENTRAL CO-OP. BANK LTD. Versus COMMISSIONER OF C. EX., TRICHY

[KASTURI SETHI]

The amount received from the bank should not be called 'commission'.

AI Summary

GST liability on appraisal services - appraiser should invoice and collect GST; bank must not withhold tax. The appraiser is an independent service provider supplying services to the bank; the appraiser's fee is a taxable supply and the appraiser should invoice, collect GST from the bank and remit it to the government. The bank's practice of labeling amounts as commission and deducting or withholding tax from the appraiser's share is incorrect. The appraiser may be eligible for the threshold exemption. A prior tribunal decision under the service tax regime addressing cooperative bank-appraiser payments is cited as analogous.