GST on Asian Development Banks and International Finance Corporation

GST on Asian Development Banks and International Finance Corporation

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Introduction

GST position of both the Asian Development Banks and the International Finance Corporation has been clarified by the board vide circular no. 83/02/2019-GST dated 1st January, 2019.

1. GST on Asian Development Banks (ADB)

  • The Asian Development Banks Act, 1966 specifically provides that notwithstanding anything to the contrary contained in any other law, the Bank, its assets, properties, income and its operations and transactions shall be exempt from all the taxation and from all the customs duties.
  • Further, the Act also exempts the Bank from any obligation for payment, withholding or collection of any tax or duty.
  • Clarification by the board
    In view of above, it has been clarified that the Asian Development Bank are exempt from GST. Further it has also been clarified that the exemption is available only to services provided by ADB, however, any entity appointed by or working on behalf of the ADB will be liable to pay GST.

2. GST on International Finance Corporation

  • The International Finance Corporation Act, 1958 also provides that notwithstanding anything to the contrary contained in any other law, the Corporation, its assets, properties, income and its operations and transactions authorized by the Agreement shall be exempt from all the taxation and from all the customs duties.
  • Further, the Act also exempts the Corporation from the liability for the collection or payment of any tax or duty.
  • Clarification by the board
    In view of above, it has been clarified that the International Finance Corporation (IFC) are exempt from GST. Further it has also been clarified that the exemption is available only to services provided by IFC, however, any entity appointed by or working on behalf of the IFC will be liable to pay GST.

Banking company is liable to pay GST on the entire value of service charges

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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