The existing Indirect tax framework in India extends to the financial services (FS) sector. Since 2001, service tax has been made applicable on these services. The scope of the levy has been broadened over a period of time. Currently, all fee-based income is liable to tax. Interest, however, is excluded from the levy.
The GST will usher in a positive change for the economy as a whole. From an FS perspective, it will trigger some internal challenges. At the same time, it is a potential opportunity to contribute to the law-making process, aiming to create a predictable and less controversial indirect tax environment.
Let us know how do you think would GST change the business environment in India.
Watch this space for an in-depth understanding of how would incorporation of GST in the Financial services sector change the business environment.