MUMBAI: The Goods and Services Tax (GST) may have made banking services more expensive, but lenders believe the single producer levy creating a common market across India would boost credit growth With detailed information on taxes and businesses now available in an electronic format, bankers believe SME and self-employed portfolio may see faster credit expansion. These are traditionally the segments banks have shied away from. Retail loans have risen in the mid-to-late teens after hitting a bottom of 11% witnessed after demonetisation. Credit to the industry continued to fall for eighth straight month in May, and increased a little over 2%. In case of the banking industry, while service tax was applicable on almost all banking services, now it is going to be absorbed in the GST: Hence, the rate of the levy has gone up from 15% to 18%.

Source: Economic Times July 04, 2017 19:07 UTC