GST council likely to levy 18% GST on personal guarantee loans

According to CNBC TV-18 sources, 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.

The GST Council is likely to levy an 18 percent GST on loans secured by India Inc on bank guarantees, a CNBC-TV 18 report said, quoting sources.

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

Additionally, the GST council is expected to deliberate on levying 18 percent GST on personal guarantee given by promoters/directors against loans given by banks, the same report said.

Also Read | MC Exclusive: GST Council to discuss lower rate on motor vehicles purchased by visually impaired

According to CNBC TV-18 sources, 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".

Also Read | MC Exclusive: GST Council to discuss lower rate on motor vehicles purchased by visually impaired

The 52nd meeting of the GST Council will be held in New Delhi on 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. According to a Moneycontrol report, this year's meeting may also be looking at lowering of Goods and Services Tax (GST) rate from the current 28 percent on motor vehicles purchased by the visually impaired.