Key Highlight of the GST Council 52nd Meeting
The 52nd GST Council has recently met and recommended various changes in GST rules, provisions and regulations. Highlighting a few:
1. Corporate guarantee offered by related parties to the Bank is now taxable:
Taxable value is 1 percent of the amount of such guarantee offered, or the actual consideration, whichever is higher.
Although such recommendations may help in handling / managing on-going litigation, but not sure about the taxability in a scenario where there is no consideration between related parties i.e. whether taxability will trigger on a notional basis?
2. Automatic restoration of assets attachment after expiry of 1 year:
This is a welcome step, consequent to the recent advisory issued by the Ministry to the GST Commissioners for restoration of attachment after expiry of 1 year.
Now, the Council has recommended an ‘automatic restoration’ without any specific written order from the Commissioner. Kindly note that in case of bank attachment, the banks specifically ask for written order from the GST authority. Such a step would reduce litigation.
3. Mandatory implementation of ISD, not cross-charge mechanism
This recommendation will require companies to make necessary changes and shift from their existing cross charge mechanism to now applying for obtaining ISD registration. This would add to the existing compliance process of the companies.
The copy of the press release issued by the GST Council is attached hereunder: