Can a manufacturing company give gurantee to sister company
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 June 2011
A pvt ltd is approaching bank for loan and bank put a condition of corporate gurantee of its sister concern B Pvt ltd with floating charge creation in ROC, Both companies are engaged in manufacturing of same product.
In the above case, is their any restriction under excise laws for giving corporate gurrantee. As per CA of B ltd, there is some excise issue in this transaction and saidthat excise officer assumes both the units as single.
According to me, there is only contingent liability in the books of B and actual liability of A ltd. Further this is a financial transactions and excise laws should not be relevant in this case.
In the above case, is their any restriction under excise laws for giving corporate gurrantee. As per CA of B ltd, there is some excise issue in this transaction and saidthat excise officer assumes both the units as single.
According to me, there is only contingent liability in the books of B and actual liability of A ltd. Further this is a financial transactions and excise laws should not be relevant in this case.
CA Suresh Jain
(Expert)
24 July 2011
There is no such restriction in Central Excise Law
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Gst credit note by supplier
- Reward for festival
- 18% Rent a cab
- Missed uploading GST Invoice
- Movement of goods by packers and movers - type of sale - Reg.
- ARCA LOGIN
- Closer of business and itc of capital goods
- Accounting Treatment of Civil work to install PORTA Cabin for office use
- Appointment of Auditor By Form ADT-1
- Gratuity paid to legal heir above 20 lakh is taxable or not
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
- ITC not to be taken in accounts & GSTR-3B
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
