Earlier, the service tax is levied on loans and advances. Now GST replaces the Service tax and the GST is also applicable for Loans and Advances. The GST rate applicable is 18% on processing charges and any other charges. But it is not applicable for repayment of principal and interest.
The impact of GST loans apply to:
- Personal loan
- Home loan
- Car loan
GST on car loan
The GST will be applicable on all personal use vehicles at the rate of 28%. There is no differentiation between the petrol and diesel powered vehicle. Apart from this, a “Composition Cess†is also levied on luxury cars. The rates may increase from 29% to 50%. However the vehicles that operate on cleaner technologies and the electric vehicles attracts lower rate of taxes.
GST on Gold
Ornaments like Gold jewelry also attracts GST. The GST rate applicable is 3% on gold jewels and 5% on the jewelry making charges. This labour charge is on top on certain cases. So, the Jeweler can claim the making charges as Input tax credit while calculating the final bill to be paid by the purchaser with 3% GST.
GST on Real estate
GST on Real estate is applicable only for a property that is under development. The GST rate applicable is 12% till 31st March 2019. But from 1st April, the GST rates on residential real estate has been altered to 5% for non-affordable housing properties while for affordable housing properties the tax rate levied is 1%. This is for both commercial and residential properties. In addition to this, various building materials used for the construction of houses/flats fall under GST are taxable from 5% (sand, marble rubble, etc.) to 28% (cement, etc.).