CORPORATE GUARANTEE GIVEN TO OUR SISTER CONCERN COMPANY

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This discussion explores the Goods and Services Tax (GST) implications when a company provides a corporate guarantee to its sister concern for a loan. Experts clarify that GST is generally not applicable if the guarantee is provided without any charges. However, if consideration is paid, such as interest, GST may not apply as it's not considered an actionable claim. If no consideration is paid, GST could be applicable on the guarantee amount, similar to an actionable claim.

MAHESHA R

MAHESHA R (Querist)
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08 May 2021 Dear Experts

Kindly advise we have given the Corporate guarantee to our Sister concern company for getting loan.

The GST on the above transaction is applicable and if applicable how to calculate taxable value and rate.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 May 2021 GST not applicable if merely given the guarantee without any charges.

CS. Ashish Shah

CS. Ashish Shah (Expert)
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08 May 2021 if any consideration is payable in the form of Interest GST is not applicable as it is not actionable claim, however if no consideration is paid then GST is applicable on the Corporate Guarantee amounts like actionable claim

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