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Money lenders or Pawn brokers under GST

12 July 2017

Interest income by Money lenders against security of jewellery or other precious articles i.e Pawn Brokers - are they taxable under GST ? If yes, then at what rate ?

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3 Replies

CA Prabhakar Sinha (Finance) (36 Points)
Replied 12 July 2017

As per my point of view

Yes, if your turnover is more thare threshold limiti.e. 20 lakhs, then you will require to register under GST and charge tax on your financial services. 18% GST would be applicable on interest income.

NITIN KOTAK (SERVICE) (1465 Points)
Replied 12 July 2017

interest not covered under GST

Roger Anton (2 Points)
Replied 11 September 2018

As a pawnbroker, you make two types of supplies for GST purposes:

1) exempt supply from the provision of loans from which you derive interest income; and
2) taxable supply from the sale of forfeited pledges.

You need not charge GST on interest while GST needs to be charged at the standard-rate of 7% for the sale of forfeited pledges.