CBIC Circular No. 218/12/2024-GST: Taxability of Loans Between Overseas and Indian Affiliates Clarified

CBIC Circular No. 218/12/2024-GST: Taxability of Loans Between Overseas and Indian Affiliates Clarified

CBIC has issued Circular No. 218/12/2024-GST dated June 26, 2024, providing clarification on the taxability of transactions involving loans provided by overseas affiliates to their Indian counterparts or by persons to related entities within India.

The Circular addresses concerns from industry stakeholders regarding whether GST is applicable on transactions where loans are extended solely based on interest or discount, without additional charges like processing fees or administrative costs.

Key clarifications include:

The Circular aims to ensure uniform implementation of GST regulations across different field formations and suggests dissemination through appropriate trade notices.

For detailed information, refer to the Circular here.

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