gst in india  


VAT Service Tax India
Service Tax New Delhi
Central Excise and Service Tax
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Service Tax Tribunal

Justification of GST
Preparation for GST
Purchase Tax of GST
GST Rate Structure
VAT at the Central & State level
Goods & Services Tax Model For India
Central and State Taxes under GST
Special Industrial Area Scheme
Inter-State Transactions of Goods
Rules for CGST and SGST
Implementation of GST

GST NBFCs - Indirect tax implications

Generally, business activities of the NBFC sector are liable to Service Tax (at the Central level) and Value Added Tax (at the State level) or Central Sales Tax (Inter-State level).

Service tax

Service tax is levied on specified activities, qualifying as services, which are provided by NBFCs. Such activities are broadly covered under the service category of:

  • banking and other financial services - which specifically identifies NBFCs as service providers and covers certain financial services provided by such entities
  • business support services - covering certain incidental activities and support functions for business
  • Other service categories which may specifically cover other financial activities performed by the companies as NBFCs

Value Added Tax/ Central Sales Tax

Value Added Tax is levied on sale of goods within a particular State, and is primarily on the transfer of property in such goods. Central Sales Tax is a similar tax (at a lower rate, subject to conditions) on inter-state sale of goods.

In the current context, Value Added Tax/ Central Sales Tax would be levied on the sales performed by the NBFCs which would primarily include sale of repossessed vehicles and other goods. Further, certain States may provide for an NBFC (having business operation in that State) to qualify as ‘deemed dealer’ thus requiring mandatory registration (for example Maharashtra Value Added Tax regulations which specifically covers ‘financial institutions’ under the ‘deemed dealer’ definition).

 

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