The parent company’s corporate guarantee to its subsidiary for a bank loan will attract 18 per cent GST, recommended the GST Council on Saturday. However, there will be no GST if a director provides a personal guarantee for a loan from a bank or any financial institution to his/her own company.”
“When the corporate guarantee is given by a director to a company then then the value of service will be deemed to be zero, hence no tax,” Revenue Secretary Sanjay Malhotra said at a press conference to announce recommendations of 52nd meeting of GST Council under the Chairpersonship of Finance Minister Nirmala Sitharaman in the national capital.
Source a2ztaxcorp
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