GST on financial services: Investors, borrowers should plan finances better

You will now have to pay GST on your credit card dues, on exit fees charged by MF houses and on finance lease

The recently-issued list of FAQs on the goods and services tax (GST) by the Central Board of Direct Taxes (CBDT) gives better insight into the rates applicable on financial services. The good news is that there will be no tax on free services provided by banks, a huge relief for both banks and account holders. 

However, the government has levied 18 per cent tax on many financial services, making these more expensive. GST will now apply to exit loads charged by mutual funds (MFs). It will also be applicable on default in payment of loan instalments and credit card dues.