In a relief for foreign firms giving I loans to Indian subsidiaries, tax ices tax (GST) will not be imposed on them, subject to some caveats.
Additional fees, commissions, or related payments - over and above the amount charged as interest on these loans will attract GST at 18 per cent, the Central Board of Indirect Taxes and Customs (CBIC) has said.
The move is expected to end uncertainties on taxing loans/credit among group companies - a matter plaguing foreign entities.
The issue arose during GST audits and resulted in tax notices being served.
In taxation terms, the matter involved valuing services of foreign affiliates when the Indian recipient can claim full input tax credit (ITC).
The CBIC has said the open market value of such services can be the invoiced amount by the Indian company, assuming full ITC is available.
This story is from the June 28, 2024 edition of Business Standard.
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This story is from the June 28, 2024 edition of Business Standard.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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