Consideration represented by way of Borrowing Cost received from members to whom loan was sanctioned, amounts to Taxable supply.
Authority for Advance Ruling — Credit Cooperative Society – The applicant is a credit cooperative society and their branches are located in many states of the country like Bihar, Jharkhand, Uttar Pradesh and Delhi. The society receives money from its members in the form of deposits. The applicant is registered under the GST Act. The applicant submitted for an advance ruling as to whether consideration is represented by way of Borrowing Cost received from members to whom loan was sanctioned, amounts to Taxable supply.
Held that:- The Hon’ble Authority for Advance Ruling held that the services related to providing loan or advance in consideration of service check or other charges are not covered by the entry mentioned in serial number 27 of notification no. 12/2017-tax (rate). As a result, the supply of such services becomes a liability of goods and services tax as per law.