"The changes in GST rates
will not become expensive for the investor who is
getting out. The exit load is supposed to stay the same
for an investor. If an investor takes out the
investment, the exit load charged goes back into the
scheme.
With the revised rate of
18 per cent GST, the scheme will get a lower amount,"
says Hemant Rastogi, chief executive officer, Wiseinvest
Advisors.
He adds, “Unless decided
otherwise by the asset management company or the
industry to charge the investor exit load plus GST, it
does not affect an investor."
In the case of credit card
holders, if you don’t clear dues of Rs 2,000 with your
card provider on time, the late payment will attract GST.
INCREASED GST Where
applicable
* Late payment, annual and
renewal charges on credit card
* Exit load charges on
mutual funds
* Insurance policies for
NRIs
* Interest charged for
default in the payment of loan installment Where not
applicable
* Issuance of checkbook
and ATM services
* Assets that are
securities in nature
* Future contracts and
financial derivatives
Hardayal Prasad, managing
director and chief executive officer of SBI Card, says,
“GST has only replaced the existing service tax charged
on card fees and other charges. The current GST rate,
which was earlier the 15 per cent service tax, has now
been increased to 18 per cent, and is only applicable on
the card fees and other charges, such as late payment,
annual and renewal fees, as was the practice in the
pre-GST era.”
Other charges that have
gone up include service charges, service fees,
documentation fees and brokering charges. GST will also
not be charged on the additional interest component for
delayed payment of a loan, as it is exempted from tax.
For Non-Resident Indians, buying an insurance policy
will attract this tax.
As GST will now be levied
on several financial services, investors and borrowers
should plan their finances better. With additional taxes
being levied, delay in payment of such financial
services can cost more. It is a definitely a deterrent
for borrowers who like to roll over credit card dues.
The bank charges anywhere
between 1.5 per cent and three per cent per month on
this; add GST it will definitely hurt more.
Source::: Business Standard , Dated 15/06/2018. |