GST leviable on incentives given by Govt. to banks under Sahay Yojana scheme being not subsidy: AAR

  • Blog|News|GST & Customs|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 30 October, 2021

Recent Posts

Blog, News, FEMA & Banking

HC Upholds Petitioner’s Arrest by ED Citing Fraud Allegations, Need for Further Investigation, and Evidence Tampering Risk

Blog, News, FEMA & Banking

Reg 5 of Stockbroker Regulations Mandates 15% Interest on O/S Dues of Annual Turnover Fees; SEBI Lacks Discretion to Deviate | SAT

Latest from Taxmann

GST Taxable supply value of Supply

Case Details: Authority for Advance Rulings, Gujarat Rajkot Nagarik Sahakari Bank Ltd., In re - [2021] 131 taxmann.com 247 (AAR - GUJARAT)

Judiciary and Counsel Details

    • Sanjay Saxena and Arun Richard, Member
    • Paresh Sheth, Adv. for the Applicant.

Facts of The Case

The applicant was a multi state Schedule Co-operative bank. The State Government announced “Atma Nirbhar Gujarat Sahay Yojna” to provide loans without securities up to Rs. 1 lacs to customers charging 8% interest. Based on the performance of banks, they would be allowed one time incentive between 2% to 4% depending on the total lendings done by the Banks under the said sahay yojna. The applicant filed an application for advance ruling to determine taxability of incentive received.

AAR Held

The Authority for Advance Ruling observed that incentive specifically provided to the applicant is for motivation and encouragement for the applicant to undertake this specific scheme. The business performance of loan disbursement is the sole criteria for receiving subject incentive. In GST law, there is no special treatment to be given to incentives given by Government. Therefore, the incentive given by Government would be a consideration for applicant, as incentive amount received by applicant would be for performing and achieving success for said scheme and incentive amount would not be passed on to customers who would be getting loans. Thus, the incentive amount received would be liable to GST.

Case Review

List of Cases Referred to

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied