Rajkot Nagarik Sahakari Bank Ltd, In re [GUJ/GAAR/R/9/2019]
Ruling by: Appellate Authority for Advance Ruling, Gujarat
Facts
The Applicant is multi-state Schedule Co-operative Bank providing various services under the category of Financial and Related Service. The applicant is running three schemes for the Demat account holder namely Basic Service Demate Account, Rajkot Nagarik Investor Scheme and Rajkot Nagarik Free Scheme. In Rajkot Nagarik Free Scheme, account holder is getting some free services only because he is depositing some amount, interest free, as security and the applicant on his transactions in the Demat account.
Issue
a) Whether Refundable Interest Free Deposit received could be treated as Supply under the provisions of Goods and Services Tax Act, 2017?
Decision
It was observed by the Authority that the question asked by the Applicant was confusing and it appeared to the Authority that Applicant wanted to know whether services provided by the applicant against the Refundable Interest Free Deposit could be treated as supply and chargeable to tax.
It was observed by the Authority that Refundable Interest Free Deposit are an additional commercial consideration to cover risk of the Demat account. Thus, it was held that the monetary value of the act of providing refundable interest free deposit is the consideration for the services provided by the RNSB and therefore the services provided by RNSB can be treat as supply and chargeable to tax in the hands of the applicant
b) In the facts and circumstances of the case whether the amount of Rs. 2500/-being Refundable interest free deposit, which allows depositor same benefits, would attract GST?
Decision
It was observed that the amount of Rs. 2500/- will not attract GST being the deposit unless the supplier applies such deposit as consideration. However, the monetary value of the act of providing this deposit of Rs.2500/- will attract GST.
c) In the facts and circumstances of the case, whether first 10 free transactions subject to maximum of rupees 5 Lakh allowed to the Demat account holder depositing Refundable interest free deposit would attract GST?
Decision
It was observed that such transactions were in nature of discount and will not attract GST subject to the fulfillment of the conditions prescribed under Section 15(3) of the CGST & GGST Act.
