Margin trading finance interest charged separately from brokerage qualifies for GST exemption as consideration for loans or advances.
Case-Laws
GST
Interest charged independently of brokerage for financing securities purchases under a Margin Trading Facility is exempt from GST as consideration for extending loans or advances. The broker funds purchases beyond the client's available margin, and the funded amount is repayable with interest for the period outstanding. Although activities involving the use of money for separate consideration constitute services under the CGST Act, the exemption for lending services applies to the extent that consideration is represented by interest or discount.
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