The location of a supplier will be the state in which the person holds a bank account even if bank branches of other locations are used for rendering services to customers under the Goods and Services Tax (GST), the government clarified on Sunday. In a 32-page frequently asked questions (FAQs) list on financial services sector issued by the central board of indirect taxes and customs (CBIC), it also said that free services provided to customers are not liable to GST, in what could give relief to banks, which had received notices asking why service tax was not levied on certain free services like up to a threshold number of ATM withdrawals, credit card facilities, among others, on the basis of account balances maintained. It has been clarified that free services provided to customers are not liable to GST, which has recently been subjected to a huge litigation under service tax regime, Pratik Jain, partner & leader, indirect tax, PwC, said. He added that similar detailed clarifications by other sectoral committees under GST would be welcome. Globally, financial services sector is considered as most complex from GST standpoint. The government also said that any additional interest charged for default in payment of installment in respect of any supply, which is subject to GST, would be included in the value of such supply and therefore would be liable to GST. This would also be applicable to delayed payment of credit card dues as the exemption from levy of GST on interest specifically excludes interest charged on outstanding credit card balances. \u201cThe services of loans, advances or deposits are exempt in so far as the consideration is represented by way of interest or discount. Any charges or amounts collected over and above the interest or discount would represent taxable consideration and hence liable to GST,\u201d the CBIC said. Another controversial issue of GST liability on transactions related to securitisation, derivatives, future and forward contracts has been clarified to be exempt from GST. Only service charges or brokerage would be subject to GST. \u201cFurther, if some service charges, service fees, documentation fees, broking charges or such like fees or charges are charged, the same would be a consideration for supply of service and chargeable to GST,\u201d the government said. However, on future contracts, the government qualified the exemption saying that if the future contracts have a delivery option and the settlement of contract takes place by way of actual delivery of underlying commodity\/ currency then such forward contracts would be treated as normal supply of goods and liable to GST.