Most banks have now levied transaction fees on cash withdrawals from different bank ATMs or on cash withdrawals from branches. Hence, banking transactions such as credit card payments, fund transfer, ATM transactions, loan processing fees etc., where banks impose fees, higher tax rates would apply. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essayGST and loansLet's delve a little deeper into the issue of GST and its impact on loans. The view is that there would be a marginal increase in costs where GST comes into play, for example a personal loan, service tax in the previous tax regime was levied on processing charges and prepayment charges, these should increase but not to levels that cause concern. For example, the processing fee, depending on the lender, used to be charged at 1-2% of the loan and this fee would attract a 15% service charge, now it would rise to 18%. A marginal increase in the cost of borrowing is also applicable to home loans, car loans and personal loans. GST and Mutual Funds The impact of GST on mutual funds will be minimal. The GST will be on the Total Expense Ratio (TER), which is the measure of costs incurred by a mutual fund company in managing its mutual funds. The TER rate is expected to increase by 3%. GST and insurance Be prepared to pay a little extra on insurance premiums. Insurance companies charge a service tax on health and term insurance products, late payment of insurance premiums, and these charges are expected to increase by 15% to 18%. However, some insurance schemes like Aam Admi Bima Yojana, Pradhan Mantri Jeevan Jyothi Bima Yojana are exempted. Let us now consider the changes that banks themselves will have to undergo as part of the implementation of the GST. Registration of Bank Branches Banks having branches in different states have to register in each state and this will come under the tax compliance of services of that respective state. You only need to register once for multiple branches in each state. This will increase compliance, reduce pressure on documentation and help ensure seamless integration of accounts across various states. Service Tax on Inter-Branch Services Banks continuously provide services to each other, which are also taxable under GST. However, the tax can be claimed as an input credit for further compensation. Input Tax Credit under GST Please note: This is just an example. Get a custom paper from our expert writers now. Get a Custom Essay Input tax in simple terms is when you are Paying taxes for the produced output you can reduce the tax you have already paid on the inputs. The purchase tax credit is not allowed under the current tax structure. Under the GST regime, the input tax credit on purchases can be set off against the taxes payable by the bank on making supplies abroad. However, they must maintain separate books of accounts to have control over all used and unused purchase tax credits and credits.