2019 (8) TMI 1221

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....ious state owned entities. The State Government has directed all the State Government owned entities to park all their surplus funds with GSFS i.e applicant. The funds received by GSFS from the Government entities are provided to the other Gujarat State owned entities as loans, which are in need of funds. The idea of formation of GSFS is to manage in-house funds of state owned entities. This results into the circulation of funds of Government entities within the ambit of State Government and its entities. 2. The applicant has requested for advance ruling in the given matter. 1. The Applicant is providing financial assistance in the form of loan to various Government of Gujarat entities, whether all such Gujarat Stated owned enti....

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....e Government entities are related person as Gujarat State Government is holding more than 25 % of outstanding voting stock or shares of both of them. 3.1 The applicant has submitted that as per sr no 27 of Notification No. 12/2017-Central Tax (Rate) under CGST Act 2017 and corresponding State notification No. 12/2017- State Tax (Rate) under GGST Act 2017 services by way of extending deposits loan or advances in so far the consideration is represented by way of interest or discount (other than interest involved in credit card services) is exempted. As per FAQs issued on financial services, the services of loan, advances or deposits are exempt in so far as the consideration is represented by way of interest or discount. Any charges or a....

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....of interest only which is exempt under GST. The applicant concluded by mentioning that considering facts of the case, relevant provisions of the law and above analysis, according to applicant since he is not charging processing fees or any other charges to any client and interest being charged as a full consideration against financial assistance given by GSFS, GST shall not be chargeable on notional processing fees or any other notional charges on services of loans provided by him to its client. 4. The notification No. 12/2017-CT (Rate) dated 28/6/2018 provided as under: (1) (2) (3) (4) (5) 27 Heading 9971 Services by way of- (a) extending deposits, loans or advances in so far as the consideration is repr....