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Is interest received on investment, a taxable supply

Others 1258 views 4 replies
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)

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)

Thanks... for the reply....

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

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.


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