Credit Granting Services Under SAC Code 997113
Credit granting services cover banking and financial services related to loans, advances, credit cards and guarantees. Banks and financial institutions assess credit, disburse funds, monitor repayments and provide related support services. Under GST, such credit granting and financial support services are classified under SAC 997113. This SAC code and its GST treatment decide how GST applies on processing fees and other loan related charges, not on the interest amount.
Credit Granting Services GST Rate for SAC Code 997113
Central banking, deposit and credit granting services under these codes are treated as financial services under GST. The main taxable portion is usually service fees, processing charges and other explicit charges, while interest on loans and advances can be exempt under separate provisions.
After the September 2025 rationalisation, fee based financial services that remain taxable are generally kept in the 18 % slab with input tax credit for registered recipients. Pure interest income without an explicit service fee usually continues to enjoy exemption where notified, so banks must split taxable charges from exempt interest carefully.
The table below explains the prevailing GST treatment for SAC code 997113, highlighting the standard 18 % rate on taxable financial service charges.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 997113 | Credit-granting services including stand-by commitment, guarantees & securities | 0% without ITC | 0% without ITC | Extending loans or advances where the consideration is interest or discount is also covered by the financial services exemption, so the typical treatment for lending and credit granting is 0% without ITC in both regimes. As with deposits, processing fees, foreclosure charges, guarantee commission and other non interest fees related to credit under this SAC are normally taxable at 18% with ITC, but those conditional cases are not reflected in the headline rate columns. |
Banks and financial institutions should map each charge such as processing fees, annual fees, locker rent or guarantee commission to the correct SAC, apply the proper GST rate in % and show the tax amount clearly on statements. The same SAC and rate should be used in GSTR 1 and GSTR 3B so that customers can claim input tax credit correctly and GST audits remain smooth.
Explore Other SAC Codes Under 9971
These SAC codes sit inside the financial services group 9971, which covers central banking, deposit services, credit granting and other core financial intermediation services. Each six digit SAC identifies a specific set of financial activities for GST reporting.
The list below highlights key six-digit SAC codes under 9971
Banks, NBFCs and other financial institutions should map each product to the correct SAC, distinguishing between taxable fee based services and exempt interest income. Correct SAC selection and GST rate application in % reduce disputes, help customers claim input tax credit on eligible charges and keep GST returns easier to justify during audits.
Conclusion
Credit granting services under SAC 997113 cover loans, advances, credit cards and related financial support. Interest on loans is usually exempt, but processing fees, annual charges and guarantee commission are typically taxed at 18 % with input tax credit for eligible borrowers. Financial institutions should split exempt interest from taxable service charges, apply SAC 997113 and the correct GST rate on those charges and reflect the same pattern in GST returns.
Important Disclaimer
The entire content on this page has been arranged to the best of the author's understanding and is subject to periodic updates as per the law for the time being in force. The above does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this content, the existence of mistakes and omissions cannot be ruled out. BUSY Infotech Private Ltd. and its associates will not be held responsible for any loss or damage arising from any inaccurate or incomplete information in this document. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.