Question
What is the applicable Goods and Services Tax (GST) rate
for corporate guarantees between parent and subsidiaries, as implemented by the Central Board of Indirect Taxes and Customs?Solution
The Central Board of Indirect Taxes and Customs (CBIC) has implemented an 18% Goods and Services Tax (GST) on corporate guarantees involving related entities, such as parent companies and subsidiaries, effective from October 26th 2023. The notification gives effect to the decision announced by the GST Council on October 8th 2023.
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