18% GST On Company Ensures For Their Subsidiaries

GST Council additionally determined to levy 5 per cent tax on millet-based flour when offered in pre-packaged

New Delhi:

The GST Council on Saturday clarified that ensures offered by corporates to their subsidiaries will appeal to an 18 per cent GST, whereas no tax will likely be levied if a private assure is given by a director to the corporate.

The council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state ministers, additionally reduce the GST charge on molasses to five per cent from 28 per cent.

It additionally ceded the suitable to tax Additional Impartial Alcohol (uncooked product for making alcohol for human consumption) to the states.

Accordingly, ENA used for human consumption will likely be exempt from Items and Providers Tax (GST), whereas ENA for industrial use will likely be taxed at 18 per cent.

Briefing reporters after the 52nd GST council assembly, Sitharaman mentioned the discount in GST on molasses will profit sugarcane farmers and allow their dues to be cleared quicker as a result of more cash will likely be left within the palms of the mills.

“The council and all of us really feel that it’s going to additionally result in a discount in the price of manufacturing cattle feed, which will likely be a serious growth,” she mentioned.

Income Secretary Sanjay Malhotra mentioned the council has determined that when the company assure is given by a director to an organization, then the worth of service will likely be deemed to be zero and therefore, no GST will likely be relevant.

“When a company assure is given by an organization to its subsidiary firm, then it will likely be deemed that the worth is 1 per cent of the company assure. So, it is going to appeal to GST at 18 per cent on 1 per cent of the full quantity assured by the guardian firm,” Malhotra mentioned.

The GST Council additionally determined to levy a decrease 5 per cent tax on millet-based flour when offered in pre-packaged and labelled type.

Flour, containing at the very least 70 per cent millets, will appeal to zero per cent GST if offered unfastened and 5 per cent if offered pre-packaged and labelled.

The council additionally determined to cap the utmost age of GST Appellate Tribunal (GSTAT) President and members.

The GSTAT President may have a most age cap of 70 years, whereas the restrict for members will likely be 67 years.

It is a change from the sooner age restrict of 67 and 65 years, respectively, for the GSTAT President and members.

(Aside from the headline, this story has not been edited by NDTV employees and is revealed from a syndicated feed.)