As per Notification No. 12/2017- Central Tax (Rate) dated 28/06/2017, S.No.27, services by way of extending deposits, loans or advances are exempted from GST. So, extending deposits are exempted supplies under GST.
Aggregate turnover includes exempted supplies. So while calculating aggregate turnover, exempted supplies are also included for taking registration.
If a person makes supply of any other business services and also makes deposits or extends loans or advances and the turnover exceeds the limit of Rs.20 lakhs, then he has to get registration.
If a person makes supply of goods and also makes deposits or extends loans or advances and the turnover does not exceed Rs.40 lakhs, then he is not liable to get registered. Here, aggregate turnover does not include the deposits/loans/advances. (Refer: Explanation to Section 22 of CGST Act)
If a person only makes deposits/loans/advances, then he is not liable to get registered because the person exclusively involves in exempted supplies (Refer: Section 23 (1) (a) of CGST Act).
21 June 2022
Thank You Udaya Sir for clarifying 1st part of the question, What is your opinion on the 2nd part? As it is Exempt Supply, we need to consider it for Proportionate ITC reversal or is there any exception to such Interest incomes.
21 June 2022
ITC reversal is required only when the input is used to effect exempted supplies. If you have taken ITC for extending deposits, such as ITC on bank charges related to such deposits, then ITC reversal of such inputs are necessary.
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