GST ON PERSONAL & CORPORATE GUARANTEE FROM 26th OCT. 23 - IMPACT ANALYSIS

This Video discusses -
1. Impact of GST on personal guarantees or corporate guarantees
2. Retrospective/Prospective application of GST personal/corporate guarantees
3. Impact of transfer pricing norms incase of personal/corporate guarantees on GST or vice-versa
4. Is there any relief for recipients like ‘alcohol companies’ or ‘petroleum companies’ or such companies supplying exempt/ Non-GST goods/services where ITC is not available to recipients?
5. What about Personal guarantees provided by director’s relatives/KMP/Others to the banks/ financial institutions for securing credit facilities for the companies. Is it taxable under GST?
6. Generally banks take the corporate or personal guarantees of a value much higher than the value of the loan. What would be the value of supply for GST purposes in such cases?
7. Other Issues
Article PDF : taxconnect.co....
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[@hardeep7485]

Sir
What will be GST applicability if corporate guarantee is provided to individual Contractors without any consideration???

[@Tax_Connect]

Consideration is 1% of guarantee amt to be charged by person providing the guarantee and ITC is available to the person for whom the guarantee is provided to bank

[@AJ-ll9kz]

How is consideration calculated?
Also who will be deducting gst for corporate guarantee ?
Whether any itc available ?

[@nikh5522]

Sir thank you for this session.Just a small clarification is required from your goodself.
Is this circular applicable on corporate guarantee given by holding to subsidiary before Oct 26, 2023.
Say for example Holding Company gave Corporate Guarantee for Rs 100 crore bank loan raised by its subsidiary in March 2022 for a Bank loan having Tenure of 5 years and maturing in March 2027.
Is GST required to be paid in this case also.
Please guide
.

[@Tax_Connect]

Yes. The circular is clarificatory and hence retrospective. However valuation u/r 28(2) is prospective. The same has been explained accordingly

[@AllAboutkhjgjjm]

Is it income for income tax as well ?

[@user-dy7gq3ge5y]

Sir, What would happen if the corporate guarantee given by holding co on behalf of subsidiary co to the Banks/FI is prior to GST Act, i.e before 2017 and corporate guarantee finished in 2023.

[@pateljanak3379]

I have one question regarding the deemed consideration of 1% when a loan is guaranteed by a holding company without any consideration. I have question regarding how payment will be settled in this case? I mean, is it compulsory to make payment ?

[@amitchoudhary7829]

Sir, please clarify if the corp. guarantee is given by company which unregistered in gst then how gst would be charged and who will pay ?

[@Tax_Connect]

The co. Giving the corp guarantee Has to take registration incase the deemed value of service as per rule 28(2) goes above the threshold for registration. Otherwise there is no liability on anybody

[@BH2025B]

Sir the GST is to be paid each year or just once?

[@Tax_Connect]

Each time

[@BH2025B]

Can you please cite the circular no. Or particular section/rule for the exact clarification.

[@deepanshugarg1473]

@@BH2025B 1. Notification No. 52/2023 Central Tax dated October 26, 2023
2. Circular No. 204/16/2023-GST dated October 27, 2023