Clarification regarding taxability of supply of securities under Securities Lending Scheme, 1997.

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....nding and borrowing of securities. Under the Scheme, lender of securities lends to a borrower through an approved intermediary to a borrower under an agreement for a specified period with the condition that the borrower will return equivalent securities of the same type or class at the end of the specified period along with the corporate benefits accruing on the securities borrowed. The transaction takes place through an electronic screen-based order matching mechanism provided by the recognised stock exchange in India. There is anonymity between the lender and borrower since there is no direct agreement between them. 2.1 The lenders earn lending fee for lending their securities to the borrowers. The security lending mechanism is depicted ....

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....Act, 1956 are not covered in the definition of goods under section 2(52) and services under section 2(102) of the Assam Goods and Services Tax Act, 2017. Therefore, a transaction in securities which involves disposal of securities is not a supply in GST and hence not taxable. 4.1 The explanation added to the definition of services w.e.f. 01.02.2019 i.e." includes facilitating or arranging transactions in securities" is only clarificatory in nature and does not have any bearing on the taxability of the services under discussion (lending of securities) in past since 01.07.2017 but relates to facilitating or arranging transactions in securities. 4.2 The activity of lending of securities is not a transaction in securities as it does not invol....