GST Council May Levy 18 Per Cent GST On Loans Secured Via Corporate Guarantees: Report

The GST council is expected to deliberate on levying 18 per cent GST on personal guarantee given by promoters/directors against loans given by banks

The 52nd meeting of the GST Council will be held in New Delhi on Saturday (October 7).

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The GST Council may levy an 18 per cent GST on loans secured by India Inc on bank guarantees, citing sources CNBC-TV 18 report said on Thursday. "GST Council is likely to deliberate on the proposal to levy 18 per cent GST on corporate guarantee extended by holding companies/subsidiaries," the sources said.

According to the report, the GST council is expected to deliberate on levying 18 per cent GST on personal guarantee given by promoters/directors against loans given by banks, the report added.

Quoting sources CNBC TV-18 said this view has come up keeping in mind that the "Council nominated law committee had come across such cases and the law committee is of a view that extending corporate/personal guarantee is a related party transaction and is considered as a supply. And supplies are treated at 18 percent GST".

The 52nd meeting of the GST Council will be held in New Delhi on Saturday (October 7).

In the previous meeting on August 2, the council had approved amendments to the Goods and Services Tax (GST) laws to provide clarity on the taxation of casinos, horse racing, and online gaming. As per news reports, this year's meeting may also be looking at lowering of GST rate from the current 28 per cent on motor vehicles purchased by the visually impaired.

Meanwhile, the GST collections rose by 10 per cent to over Rs 1.62 lakh crore in September, helped by improved compliance. This is the fourth time during current financial year that the GST collections crossed the Rs 1.6-lakh crore mark.

Last month, the gross GST revenue was Rs 1,62,712 crore. Of this, Central GST was Rs 29,818 crore, State GST was Rs 37,657 crore, Integrated GST was Rs 83,623 crore (including Rs 41,145 crore collected on import of goods) and cess was Rs 11,613 crore (including Rs 881 crore collected on import of goods), according to a statement by the finance ministry.