# NBFC Services Tax Rate Set

> NBFC services to banks now taxed at 18% GST under RBI-aligned rules.
- Title: NBFC Services Tax Rate Set · The Economic Times | Shortify
- Summary: NBFC services to banks now taxed at 18% GST under RBI-aligned rules. The GST Council has set 18% GST on NBFC services to banks, with interest on loans exempt…
- Keywords: nbfc, gst, rbi, co-lending, banking, taxation, Services, Tax, Rate, Set, The Economic Times
- Source: The Economic Times — https://economictimes.indiatimes.com/industry/banking/finance/banking/nbfc-services-to-banks-will-attract-18-gst/articleshow/134772282.cms
- Author: Anuradha Shukla
- Published: 2026-10-07T17:56:00+00:00
- Read time: 1 min
- Topics: nbfc, gst, rbi, co-lending, banking, taxation
## GST Council Decision
The fitment committee under the GST Council decided NBFC services to banks will be taxed at 18% GST with valuation aligned to RBI methodology.
## Interest Exempt from GST
Interest on underlying loans remains exempt from GST under the new rules.
## Co-Lending Tax Treatment
The 18% GST applies to NBFC services in co-lending arrangements with banks.
## RBI Valuation Methodology
NBFC service valuation follows RBI's prescribed methodology to reduce tax interpretation disputes.
## Notional Charges Clarified
Banks' internal fund transfers will be treated as interest for GST purposes.
## Industry Impact
This clarification resolves tax ambiguities for co-lending structures and enables smoother partnerships between lenders and fintech platforms.
## Key takeaway

The GST Council has set 18% GST on NBFC services to banks, with interest on loans exempt and valuation following RBI methodology to resolve tax ambiguities in co-lending arrangements.