whatsapp
Arrow Blog Image
GST and its impact on Financial Services

GST, as we all know, is an indirect tax throughout India to replace taxes levied by the central and state governments. With GST becoming effective from July 1, it is imperative for all the Finance department students of PGDM course to know about the impact of GST on Financial Services of India. From July onward, tax on financial services transactions will rise from the current 15% to 18% as the goods and services tax.1

Mentioned below are the impacts that will be seen in financial services of India after GST is levied-

Impact on Mutual Funds– In case of mutual funds, the asset management companies (AMC) incur certain expenses to impact a scheme’s net asset worth (NAV) which in turn attract service taxes. In fact, many components of these service charges such as custodian fees, registrar and transfer agent fees and management fees attract service tax. Upon implementation of GST, the total expense ratio (TER) will obviously spike up given the rise from 15% to 18%. This increase is directly going to affect the investor.

Impact on Insurance Companies- Insurance premiums are set to go up with GST coming to play. Its immediate effect will have to be borne by the customers. However, the non-life companies will continue to get exemption from input tax credit.

Impact on Real Estate- It is often expected that due to the high value transaction involved in real estate, even slightest change in tax can hike up the overall cost. With GST, most of the construction material falls under 18% and 28% slabs but with the availability of input tax credit, the overall impact is expected to be neutralized.

Impact on Banking Services- Services that attract charges such as non-maintenance of minimum monthly average balance or ATM transaction (after the free transactions) will now be taxed at 18% instead of 15%.  However, even in this department, the effect is expected to soften a bit with input tax credit.

Recommend for You

  • Best PGDM College in Gurugram Best PGDM Program in Gurugram Best BBA College in Delhi NCR Best MBA College in Delhi NCR Marketing Conclave Speakers HR Conclave Speakers blog Latest News Blogs News Highlighting Excellence in Academia: A Closer Look at Dr. Siddhartha Bhattacharya’s Contributions at JK Business School June 12, 2024
    Highlighting Excellence in Academia: A Closer Look at Dr. Siddhartha Bhattacharya’s Contributions at JK Business School
    Read More Arrow Icon
  • Best PGDM College in Gurugram Best PGDM Program in Gurugram Best BBA College in Delhi NCR Best MBA College in Delhi NCR blog Latest News MBA Collage in Gurugam News and Events Blogs News Pioneering Paths: Diksha Arora’s Ascendancy from JK Business School to Corporate Success June 16, 2024
    Pioneering Paths: Diksha Arora’s Ascendancy from JK Business School to Corporate Success
    Read More Arrow Icon
  • Best PGDM College in Gurugram Best PGDM Program in Gurugram Best BBA College in Delhi NCR Best MBA College in Delhi NCR Marketing Conclave Speakers blog Latest News News and Events Blogs News Highlighting Excellence in Academia: The Inspiring Journey of Professor Dikshika Jakhar at JK Business School June 30, 2024
    Highlighting Excellence in Academia: The Inspiring Journey of Professor Dikshika Jakhar at JK Business School
    Read More Arrow Icon
  • Best PGDM College in Gurugram Best PGDM Program in Gurugram Best BBA College in Delhi NCR Best MBA College in Delhi NCR Marketing Conclave Speakers blog Latest News News and Events Blogs News Bharti Kumari: A Journey from JK Business School to Industry Excellence at Yugen Infra July 1, 2024
    Bharti Kumari: A Journey from JK Business School to Industry Excellence at Yugen Infra
    Read More Arrow Icon
Room Image