<p style="text-align:justify"><span style="font-size:14px"><span style="color:#34495e">Commercial Paper (&lsquo;CP&rsquo;) and Certificate of Deposit (&lsquo;CD&rsquo;) are unsecured money market instruments which are issued in the form of a promissory note or in a dematerialized form through any of the depositories approved by and registered with SEBI. CPs are normally issued by highly rated companies, primary dealers and financial institutions at a discount to the face value. CDs can be issued by Scheduled Commercial Banks (excluding Regional Rural Banks and Local Area Banks) and All &ndash; India Financial Institutions (FIs) permitted by RBI.</span></span></p>

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<span style="font-size:14px"><span style="color:#34495e">Since these are instruments for lending or borrowing money wherein consideration is represented by way of a discount or subscription to CPs or CDs, the same would be covered by the entry relating to &lsquo;services by way of extending deposits, loans or advances in so far as consideration is represented by way of interest or discount&rsquo; and is not liable to GST [serial no. 27 of the table of notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017, as amended].</span></span></p>

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<span style="font-size:14px"><span style="color:#34495e">Further, promissory note is included in the definition of &lsquo;money&rsquo; as given in clause (75) of Section 2 of the CGST Act, 2017 and hence not liable to GST. However, if </span><span style="color:#34495e">some service charges or service fees or documentation fees or broking charges or such like fees or charges are charged, the same would be a consideration for supply of services and chargeable to GST.</span></span></p>