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New Delhi: The Union Finance Ministry has issued a notification stating Goods and Services Tax (GST) will be levied on guarantees provided by corporates to their subsidiaries prospectively. GST council, comprising central and state finance ministers, had earlier this month clarified on the taxability of corporate guarantee, saying it would be subject to 18 per cent GST.
Tax experts had then sought clarity on GST levy on past transactions as many companies might not be able to recover the tax from subsidiaries or group companies. The finance ministry on Thursday notified amendments to Central GST rules, saying that the corporate guarantee would be taxable from the date of the notification.
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