Taxability of Loan Transactions between Overseas and Indian Affiliates

Last updated: 28 June 2024

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This notification from the CBIC clarifies the Goods and Services Tax (GST) implications for loans provided by an overseas affiliate to an Indian affiliate, or between related persons. It addresses whether such transactions, where consideration is solely interest or discount, are considered a supply subject to GST. The clarification aims to ensure consistent application of GST laws.

F. No. CBIC-20001/4/2024-GST Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs GST Policy Wing ***** North Block, New Delhi Dated the 26th June 2024 To, The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissio

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FAQ :

The notification clarifies the taxability of loan transactions between overseas and Indian affiliates, and between related persons, under GST.

It covers loans provided by an overseas affiliate to its Indian entity, or by any person to a related person, where the only consideration is interest or discount.

The notification seeks to clarify whether GST is applicable on such transactions where the consideration is only interest or discount.

This clarification is issued by the Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance, Government of India.

The purpose is to clarify the issue and ensure uniform implementation of GST provisions regarding these loan transactions.