GST Valuation if Services provided at concessional rate by Banks: CBIC

By | June 4, 2018
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(Last Updated On: June 4, 2018)

Can value of services be enhanced  by invoking the CGST Rules in case  of services provided by banks at a concessional / differential rate to a recipient other than ‘related party’ / ‘distinct person’?

Banks provide various services to customers for a charge. However, at times,  account holders / customers are provided services free or at a concessional / differential rate. The free or concessional / differential rate is offered considering factors such as credit rating and stability of the customer, size of relationship, expected future business or the opportunity presented in the market elsewhere etc. As a result, the charges for the same service may differ from customer to customer.

Such services provided to persons who are not related persons will be taxable  on the transaction value, that is, the value of the services charged or recovered from the customers or account holders as per section 15 of the CGST Act, 2017. Thus, in case of services provided at a concessional / differential rate to a recipient other than ‘related party’ / ‘distinct person’, there is no requirement
for enhancing the value of services by invoking the CGST Rules, 2017.

Q 32 of GST FAQs on Financial Services Sector published by CBIC

Direct Taxes Ready Reckoner
Service Tax Ready Reckoner
Company Law Ready Reckoner
tax deduction at source

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