gst treatment savings deposit

[Madhavan iyengar]

A NBFC receives deposits like savings bank from customers and pays interest on the said deposit placed minimum deposit is ₹ 500 /- however the customer is required to maintain the balance of ₹ 500 /- if the balance falls short of ₹ 500/- then the NBFC will write back the amount below ₹ 500/- after 2 years and it will be treated as income and then transferred to reserve account

query whether this income ie deposit not paid back to customer which will be written back by NBFC will it be liable for gst

AI Summary

Debate on GST applicability for NBFCs on income from customer deposit write-backs; is it a taxable service? A discussion on a forum addresses whether a non-banking financial company (NBFC) should apply GST to amounts written back as income when customers fail to maintain a minimum balance in their deposit accounts. One participant argues that such amounts are taxable as a supply of service, akin to a penalty. Others question the applicability of GST if the principal deposit is exempt and seek clarification on whether the write-back constitutes a service. Some suggest that the act of tolerating a customer's failure to maintain a balance could be considered a supply, while others call for official guidance from the GST Council.