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ManiMaran1992 (not) (25 Points)

12 June 2025

Dear sir/madam

Am doing NBFC business supply service to BFC (car loan and mortgage loan) getting commission on monthly basis how can raise invoice to BFC (RCM/FCM ) what is the Gst Rate

Pls advice

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Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (8139 Points)
Replied 12 June 2025

As an NBFC providing supply services to BFC (car loan and mortgage loan), you're required to raise invoices and charge GST accordingly.

Here's a brief overview: GST Rate The GST rate for services provided by NBFCs to BFCs can vary depending on the specific services and the GST notification applicable to your business.

However, generally, the GST rate for financial services, including loan-related services, is *18%*.

Invoice and GST Compliance When raising invoices to BFC, consider the following: -

*Invoice format*: Ensure your invoices comply with the GST invoice rules, including details like GSTIN, invoice number, date, descripttion of services, and GST amount.

- *GSTIN: Verify the GSTIN of the BFC and ensure you're charging GST correctly. -

GST calculation: Calculate the GST amount based on the applicable GST rate (18% in this case) and the commission amount. Reverse Charge Mechanism (RCM) In some cases, the recipient (BFC) might be liable to pay GST under the Reverse Charge Mechanism (RCM).

However, for services provided by NBFCs to BFCs, the general practice is to follow the

Forward Charge Mechanism (FCM)*, where the supplier (your NBFC) charges GST to the recipient (BFC).

Documentation and Compliance To ensure compliance, maintain proper documentation, including: -

*Invoices*: Raise invoices that comply with GST rules and include all necessary details. -

*GST returns*: File your GST returns accurately and on time, reporting the GST charged to BFC. -