TaxTMI 
TaxTMI 
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.
Exemption from liability of Service tax on commission received against doing government business by the commercial bank
09 May 2025 
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Taxability of bank commission: commissions from central bank for government business are taxable under GST and not exempt.
Notification No. 22/2006 ST formerly exempted bank services to the central bank, including commission for government business, but that service tax exemption was rescinded and does not carry over into GST. There is no equivalent GST exemption for commissions received by banks from the central bank for government business; therefore such commission is treated as taxable under GST, and banks must charge and remit GST. Transitional recovery provisions may render earlier recoverable amounts as arrears under GST and ineligible as input tax credit. (AI Summary)
Notification No. 22/2006 ST formerly exempted bank services to the central bank, including commission for government business, but that service tax exemption was rescinded and does not carry over into GST. There is no equivalent GST exemption for commissions received by banks from the central bank for government business; therefore such commission is treated as taxable under GST, and banks must charge and remit GST. Transitional recovery provisions may render earlier recoverable amounts as arrears under GST and ineligible as input tax credit. (AI Summary)