Exemption from liability of Service tax on commission received against doing government business by the commercial bank

[Sudhir Kumar]

Whether the commission received by the commercial banks from RBI in lieu of government business transaction is taxable or it is exempted under notification no. 22/200-ST. Please give opinion.

AI Summary

Banks Must Pay GST on Government Transaction Commissions Following Expiry of Previous Service Tax Exemption Notification Commercial banks receive commission from the Reserve Bank of India for handling government business transactions. The key legal issue is whether this commission is taxable under GST. Previously, Notification No. 22/2006-ST exempted such services, but this notification is no longer valid since GST implementation in July 2017. Under current GST law, there is no specific exemption, so banks must charge and pay GST on commissions received for government business transactions.