TaxTMI 
TaxTMI 
Clarification regarding taxability of supply of securities under Securities Lending Scheme, 1997
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.... Bengaluru-560009, Dated: 14-10-2019 COMMISSIONER OF COMMERCIAL TAXES CIRCULAR No. GST-24/2019-20 Subject: Clarification regarding taxability of supply of securities under Securities Lending Scheme, 1997 - reg. Trade has requested clarification on whether the supply of securities under Securities Lending Scheme, 1997 ("Scheme") by the lender is taxable under GST. 2. Securities a....
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....heir securities to the borrowers. The security lending mechanism is depicted in the diagram below: - 2.2 In the above chart: (i) Lender is a person who deposits the securities registered in his name or in the name of any other person duly authorised on his behalf with an approved intermediary for the purpose of lending under the scheme. (ii) Borrower is a person who borr....
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....om one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; 4. Securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (Central Act 42 of 1956) are not covered in the definition of goods under section 2(52) and services under section 2(102) of the KGST Act. Therefore, a transact....
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.... explanation added to the definition of services w.e.f. 01.02.2019 i.e. "includes facilitating or arranging transactions in securities" was only clarificatory in nature and does not have any bearing on the taxability of this service in past since 01.07.2017. 4.3 Apart from above, the activities of the intermediaries facilitating lending and borrowing of securities for commission or fee ar....