<p style="text-align:justify"><span style="font-size:14px"><strong>Question:&nbsp;</strong>Section 7 of the CGST Act, 2017 read with Schedule I thereto provides that services supplied without consideration to related persons or distinct persons only would qualify as &lsquo;supply&rsquo;. Also import of services by bank from a related person or from any of its establishments outside India in the course or furtherance of business will be supply even if imported without consideration. Therefore, where the services are supplied by a supplier without consideration to an unrelated recipient or a person other than a related or distinct person, the same would not amount to supply and not liable to GST.</span></p>

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<p style="text-align:justify"><span style="font-size:14px"><strong>Answer:</strong></span></p>

<p style="text-align:justify"><span style="font-size:14px"><span style="color:#34495e">Banks provide various services to customers for a charge. However, at times, account holders / customers are provided services free or at a concessional / differential rate. The free or concessional / differential rate is offered considering factors such as credit rating and stability of the customer, size of relationship, expected future business or the opportunity presented in the market elsewhere etc. As a result, the charges for the same service may differ from customer to customer.</span></span></p>

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<span style="font-size:14px"><span style="color:#34495e">Such services provided to persons who are not related persons will be taxable on the transaction value, that is, the value of the services charged or recovered from the customers or account holders as per section 15 of the CGST Act, 2017. Thus, in case of services provided at a concessional / differential rate to a recipient other than &lsquo;related party&rsquo; / &lsquo;distinct person&rsquo;, there is no requirement for enhancing the value of services by invoking the CGST Rules, 2017.</span></span></p>