The finance ministry has issued a notification stating items and companies tax will probably be levied on ensures supplied by corporates to their subsidiaries prospectively. The Goods and Services Tax (GST) council, comprising central and state finance ministers, had earlier this month clarified on the taxability of company assure, saying it will be topic to 18 per cent GST.
Tax specialists had then sought readability on GST levy on previous transactions as many corporations won’t be capable of get better the tax from subsidiaries or group corporations. The finance ministry on Thursday notified amendments to Central GST guidelines, saying that the company assure could be taxable from the date of the notification. GST at 18 per cent will probably be levied on 1 per cent of the overall quantity assured by the mum or dad firm or the precise consideration, whichever is larger, the notification mentioned.
“This prospective modification shall have no bearing on transactions executed prior to October 26, consequently preserving the tax risk associated with past transactions,” AMRG & Associates Senior Partner Rajat Mohan mentioned. Corporate entities should fastidiously consider their tax place when reviewing or renewing company ensures and inside lending agreements the place contractual constraints stop the evaluation of consideration, Mohan added.
(This story has not been edited by News18 employees and is printed from a syndicated information company feed – PTI)
