Is interest received on investment, a taxable supply

1211 views 4 replies

sanjay sunny

8 Points Joined February 2018

Our firm have invested a certain amount in another firm, which gives us interest in return. Interest is the only income our firm is earning. Does interest come under the purview of taxable supply and if the income crosses 20 lakhs, do we need to attain GST registration.

Replies (4)

CA Sorav Gupta

Chartered Accountant

1005 Points Joined August 2022

GST is exempt from interest earned on investments or loans advanced. Hence, no need to obtain registration. However, if the firm makes any taxable supply then GST registration may be required since the interest income will be considered in calculating the threshold limit for registration.

In case of any further queries, kindly mail me at casoravgupta @ gmail.com

Thanks & Regards
ACA. Sorav Gupta
(Practicing Chartered Accountant)

sanjay sunny

8 Points Joined February 2018

Thanks... for the reply....

APURBA CHATTERJEE

QUALIFIED CHARTERED ACCOUNTANT

613 Points Joined November 2016

Interest income is exempted from GST, so based on section 23 of the CGST Act, 2017, GST registration is not required.

Pankaj Rawat

GST Practitioner

55067 Points Joined June 2017

Such interest is Exempted under Notification 12/2017 CT rate.

As per Section 23 of CGST Act if you are engaged exclusively in supply of Exempted supply, then even though your AG turnover exceeds the threshold limit as prescribed in Section 22 you are not liable take Registration.

Note : But if you made any taxable supply , ie even for Rupee then you are liable to take registration mandatory.