52nd GST Council meet likely to decide on Personal Guarantee Loans

The GST Council is expected to levy an 18 percent GST on loans secured by India Inc on bank guarantees, according to a report citing sources.

“GST Council is likely to deliberate on the proposal to levy 18 percent GST on corporate guarantee extended by holding companies/ subsidiaries,” sources stated.

Furthermore, the GST council is expected to deliberate on levying 18 percent GST on personal guarantees given by promoters/directors against bank loans, according to the same report.

According to sources, this viewpoint was formed after the “council nominated law committee had come across such cases, and the law committee is of the opinion that extending corporate/personal guarantee is a related party transaction and is considered as a supply. And supplies are subject to 18% GST.”

The GST Council will hold its 52nd meeting on October 7 in New Delhi. The council previously approved amendments to the Goods and Services Tax (GST) laws on August 2 to provide clarity on the taxation of casinos, horse racing, and online gaming.

According to a report, this year’s meeting may also consider lowering the GST rate on motor vehicles purchased by the visually impaired from the current 28 percent.