Gst in bank interest

Yes, it is charged at 18% GST rate.

ya on their service charge  gst rate is 18%

No, neither banks nor Non-Banking Financial Companies charge GST on the interest of a loan. GST, acronym for Goods and Services Tax, is applicable only for goods and services- availing any loan, home, personal, car or business is neither a service nor a good- hence, the ambit of GST does not include this aspect.

When availing a loan, the main charges you need to look out for include the rate of interest, the processing fees, stamp duty and registration fees (for home loans). Excluding the rate of interest, the other charges are all one time fees that have to be paid by the loan applicant.

The rate of interest is determined by the lending institution, which could be a bank or an NBFC. This interest, which can be called the cost of availing the loan is charged on the total amount borrowed as the loan and is paid in the form of Equated Monthly Installments (EMIs) during the tenure of repayment. There is no role of GST when availing any loan.

thanks a lot