Which of the following statements is not correct? (1) Bank charges are not zero-rated item. (2) Input VAT is claimable on bank charges. (3) Bank charges are not exempt supply. (4) Input VAT is not claimable on bank charges. (5) Finance costs are exempt supply.

Which of the following statements is not correct? (1) Bank charges are not zero-rated item. (2) Input VAT is claimable on bank charges. (3) Bank charges are not exempt supply. (4) Input VAT is not claimable on bank charges. (5) Finance costs are exempt supply.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Regulation of Commercial Banks

The main function of any commercial bank is accepting deposits and lending money to borrowers. Apart from these two activities, commercial banks provide a host of other services to their customers, like discounting bills of exchange, acting as a custodian of a customer's will, and so on. In the absence of a proper regulatory framework or proper regulations in place, the commercial banks would have ended up charging exorbitant or varied rates of interest or service charges on the funds loaned by them or the services performed by them.

Question

Which of the following statements is not correct?
(1) Bank charges are not zero-rated item.
(2) Input VAT is claimable on bank charges.
(3) Bank charges are not exempt supply.
(4) Input VAT is not claimable on bank charges.
(5) Finance costs are exempt supply.

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