The Commissioner of State Tax, Maharashtra on July 04, 2024, issued a Clarification regarding the taxability of the transaction of providing a loan by an overseas affiliate to its Indian affiliate or by a person to a related person.
The Circular issued by CBIC is being made applicable mutatis mutandis in implementation of the MGST Act, 2017. The CBIC circular stated the following namely: -
• It has stated that representations have been received from trade and industry seeking clarity on whether there is any supply involved in the transaction of granting a loan by a person to a related person or by an overseas affiliate to its Indian entity, where the consideration being paid is only by way of interest or discount, and whether any GST is applicable on the same.
• It has stated that in order to ensure uniformity in the implementation of the provisions of the law across field formations, the Board provided a table clarifying the same.
[Notification No. JC(HQ)-5/AR-2/GST/2024/ADM-8/B-84]
