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.
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