The GST Council on Saturday clarified that guarantees provided by corporates to their subsidiaries will attract an 18 per cent GST, while no tax will be levie🍸d if a personal guarantee is given by a director to the company.
The council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state mini🍸sters, also cut the GST rate on molasses to 5 per cent from 28 per cent.
It also ceded the right to tax Extra Neutral Alcoh▨ol (raw product for making alcohol for human consumption) to the states.
Accordingly, ENA used for human consumption will be exempt from Goods and Services T𒁏ax (GST), while ENA for industrial use will be taxed at 18 per cent.
Briefing reporters after the 52nd GST council meeting, Sitharaman said the reduction in GST on molasses will benefit sugarcane farmers and enable their dues to be cleared faster because more money will be left in the hands of t👍he mills.
"The council and we all feel that i💜t will also lead to a reduction in the cost of manufacturing cattle feed, which will be a major development," s🦹he said.
Revenue Secreta🌜ry Sanjay Malhotra said the council has decided that when the corporate guarantee is given by a director to a company, t꧙hen the value of service will be deemed to be zero and hence, no GST will be applicable.
"When a corporate guarantee is given by a company to its subsidiary company, then it will be deemed that the value is 1 per cen🅰t of the corporate guarantee. So, it will attract GST at 18 per cent on 1 per cent of the total amount guaranteed by the parent company," Malhotra said.
The GST Council also decided to l༺evy a lower 5 per cent tax on millet-based flour when sold in pre-packaged and lab🦋elled form.
Flour, cಌontaining at least 70 per cent millets, wi🐻ll attract zero per cent GST if sold loose and 5 per cent if sold pre-packaged and labelled.
The council also deci𒀰ded to cap the m🐲aximum age of GST Appellate Tribunal (GSTAT) President and members.
The GSTAT ꧒President will have a maximum age cap of 70 years, while the limit for members will be 67 years.
This is a change from the earlier ag🌞e limit of 67 and 65 years, respectively, for the GSTAT President and members.
-With PTI Input
