look news india
The Indian company has got relief from Punjab and Haryana High Court. The High Court had put a stay on a circular. In which corporate guarantees given by holding companies for the benefit of their subsidiaries were made subject to GST.
The circular issued by the Central Board of Indirect Taxes and Customs (CBIC) last October was stayed by the High Court in an interim order. This circular stated that a corporate guarantee given by a holding company to a bank or financial institution for sanctioning loans to its subsidiaries will be a supply of service subject to GST. It was also said that, even if there was no substitution involved, taxation would arise. The case pending before the High Court also involves a challenge to the valuation of corporate guarantees.