Team Blitz India
NEW DELHI: The GST Council on October 7 clarified that guarantees provided by corporates to their subsidiaries will attract an 18 per cent GST, while no tax will be levied if a personal guarantee is given by a director of the company. The council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, also cut the GST rate on molasses to 5 per cent from 28 per cent.
It also ceded the right to tax Extra Neutral Alcohol (raw product for making alcohol for human consumption) to the states. Accordingly, ENA used for human consumption will be exempt from Goods and Services Tax (GST), while ENA for industrial use will be taxed at 18 per cent.
Briefing reporters after the council meeting, Sitharaman said the reduction in GST on molasses will benefit sugarcane farmers and enable their dues to be cleared faster because more money will be left in the hands of the mills.
“The council and we all feel that it will also lead to a reduction in the cost of manufacturing cattle feed, which will be a major development,” she said.