Free banking services offered to customers not under GST ambit

In relief for the banking sector, the government cleared the ambiguity over goods and services tax (GST) on ‘free services’ offered to customers. The Centre said these will not attract GST.

The ambiguity arose after notices were sent to lenders for non-payment of service tax under the pre-GST regime. That issue is yet to be sorted, though the government has given enough signals that these notices might be withdrawn.

In 32 pages of ‘Frequently Asked Questions’ (FAQs) for the financial services sector, issued on Sunday, the Central Board of Indirect Taxes and Customs (CBIC) clarified there would be no levy on services