A lot has been talked about the impact of Goods and Service Tax (GST) on products and services. Talking about the services that directly affect the lives Indian population, we can not ignore loans. The credit facility is the most preferred choice at the time of financial crisis. You know that the GST has replaced the service tax which was supposed to be charged on the processing fee, the one time fee, at the time of disbursal of the loan.
GST Tax List for Loans
The processing fee is variable from one loan to another. For instance, if you are taking a personal loan, the processing fee generally ranges from 0.50% to 2.50% of the loan amount. In addition to this, there is an additional GST impact o loan of 18% on the processing fee. Similar is the case with home loans wherein presently most of the top banks have no processing fee but it generally is up to 1% of the loan amount. Let us see how GST has affected the payments on these two loans.
Processing fee on Loans before and after GST
A personal loan facility has always been the first choice of people who want instant money. Now, if you are planning a holiday with your family or want to go on a solo trip, you can take this loan. A home loan is the cheapest loan and may be taken to build a new home or buy a ready-to-shift flat.
Other than the EMI (regular payment for the whole tenure), you have to pay the processing fee (one-time payment) on these loans. Since the tax applicable on loans has come under GST tax list of 18 per cent.
If the disbursal amount for your personal loan is ₹2,00,000 the difference between the processing fee is as follows:
- Before GST- Processing fee (1% of the loan amount) + Service Tax (15% of the processing fee) = ₹2,000 + 300 = ₹2,300
- After GST- Processing fee (1% of the loan amount) + GST (18% of the processing fee) = ₹2,000 + 360 = ₹2,360
- If the disbursal amount for your home loan is ₹20,00,000 the difference between the processing fee is as follows:
- Before GST- Processing fee (1% of the loan amount) + Service Tax (15% of the processing fee) = ₹20,000 + 3000 = ₹20,300
- After GST- Processing fee (1% of the loan amount) + GST (18% of the processing fee) = ₹20,000 + 3600 = ₹20,360
As you can see, not much has changed in the case of loans and hence you do not have to worry about paying extra and apply for the loan whichever is required.
How can you check your CIBIL score online?
You should also know that banks and NBFCs take into account the credit score or CIBIL score of the applicant. So, if you have a good CIBIL score, your application is considered to be a reliable one especially in the case of personal loans. If you do not know your CIBIL score yet, read below how can you do it. Checking the credit score or CIBIL score is very simple through the online portal. You can check it with the help of your PAN card only. You just have to mention the below details:
- Provide your full name as mentioned on the PAN card
- Enter your Date of Birth
- Choose the gender you belong to
- Mention your PAN card number
- Enter your contact address
- Provide the email ID on which you want to get the credit report
- Enter your mobile number
- Submit the form
What are the upcoming changes in GST Tax Rate List?
The discussion is going on to merge the 18 % and 12 % tax slabs and reduce the highest tax slab from 28 percent to 25 % as soon as the stability will be observed in the market. You can thus expect some big ups and downs in the GST tax regime which are directly associated with your day-to-day life.
The GST Council is planning to include power, real estate, and petroleum products. The final decision is yet to be taken but the council has said that covering petrol and diesel under the new tax regime is not going to affect the state’s revenue.
There are chances that the highest tax slab has been considered suitable for the petroleum products and the state will be free to levy additional cess. The reason behind allowing the state to charge additional cess is that the new implementation should not affect the existing revenue generated.