Maharashtra provides clarity on Tax Rules on Overseas Loans

The Central Board of Indirect Taxes and Customs (CBIC) had issued a circular on 26th June clarifying issues regarding any supply involved in the transaction of granting of loan by a person to a related person or by an overseas affiliate to its Indian entity, where the consideration being paid is only by way of interest or discount, and whether any GST is applicable on the same.

 Additionally on July 04, 2024, the CBIC issued a circular stating that the same clarifications provided in the CBIC circular will be applied to the Maharashtra Goods and Service Tax (MGST) Act of 2017.

The Latin term MUTATIS MUTANDIS means With Necessary Changes. It implies that while the core content of the CBIC circular will be used, adjustments will be made to ensure it fits within the context of MGST Act.

This trade circular is intended to provide clarification on the issues raised and ensures uniformity in the implementation of provisions of the law across the field formations.  If anyone faces difficulties or has questions about how to implement the clarifications in the circular, should contact the Office of the Commissioner of State Tax , Maharashtra , for assistance.