Personal guarantee to attract 18% GST in exceptional considerations

Centre to issue circular soon outlining scenarios, which could trigger tax liability

The personal guarantee offered by directors and promoters to a bank against credit sanctioned to the company may be subject to goods and services tax (GST), if there is a “consideration” of any manner. 

The Centre is likely to put out a detailed circular outlining the exceptional cases, which could trigger tax liability of 18 per cent, in case of personal guarantee, said a government official. Those exceptions could be certain scenarios where the director, who had provided the guarantee, is no longer connected with the management but his guarantee is essential. 

It may be because the new management’s guarantee