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The GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state ministers, has clarified that guarantees provided by corporates to their subsidiaries will attract an 18 per cent GST, but no tax will be levied on the personal guarantee given by a director of a company raising loans from the market. The council also capped the maximum age for appointment of President and members in the GST appellate tribunal (GSTAT) at 70 years and 67 years, respectively.

Revenue Secretary Sanjay Malhotra said the council has decided that when the corporate guarantee is given by a director to a company, then the value of service will be deemed to be zero and hence, no GST will be applicable. He said ‘When a corporate guarantee is given by a company to its subsidiary company, then it will be deemed that the value is 1 per cent 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’.

With regard to online gaming, on which the council had in its previous two meetings clarified a 28 per cent tax on full face value, states like Delhi and Goa raised the issue of GST show-cause notices being sent to companies. The revenue secretary informed states that the 28 per cent levy was applicable to e-gaming, casinos and horse racing from the beginning and notices are being sent accordingly. 

To promote tourism, GST Council has recommended conditional and limited duration IGST exemption to foreign flag foreign going vessel when it converts to coastal run. Foreign going vessels are liable to pay 5% IGST on the value of the vessel if it converts to coastal run. GST Council recommends conditional IGST exemption to foreign flag foreign going vessel when it converts to coastal run subject to its reconversion to foreign going vessel in six months.