Manappuram Finance LTD vs. The Union Of INDIA
Held
The High Court quashed the show cause notice, holding that the issues raised were covered in the petitioner's favour by recent clarifications issued by the CBIC through Circular No. 204/16/2023-GST and Circular No. 218/12/2024-GST, which clarified that under specific conditions, no GST is payable on such transactions.
Facts
Manappuram Finance Ltd. challenged a show cause notice demanding GST on two transactions: personal guarantees provided by its director for company loans without consideration, and loans extended to its subsidiary without charging processing fees (only interest/discount). The petitioner contended that these activities should not attract GST.
Key Issues
Whether GST is payable on reverse charge basis for personal guarantees provided by a director to a company without consideration, and whether GST is payable on loans extended by a company to its subsidiary where only interest or discount is charged.
Sections Cited
Section 15, Section 7, Schedule I, Rule 28
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 29TH DAY OF JULY 2024 / 7TH SRAVANA, 1946 WP(C) NO. 24617 OF 2022 PETITIONER: MANAPPURAM FINANCE LTD, MANAPPURAM HOUSE, VALAPAD PO, THRISSUR, PIN - 680 567, REPRESENTED BY GENERAL MANAGER M/S MANAPPURAM FINANCE LTD., SHRI M.V. BABU, S/O. M.T. VARGHESE, AGED 73 YEARS, RESIDING AT MAZHUVANCHERRY PARAMBATH HOUSE, AYYAMPILLY, ERNAKULAM, PIN – 682 501. BY ADVS. V. RAGHURAMAN (SR.) BHANUMURTHY K.S.BHARATHAN AADITHYAN S.MANNALI ALPHIN ANTONY VISAKH ANTONY CHRISTINE MATHEW RANCE R. RESPONDENTS: 1 THE UNION OF INDIA, MINISTRY OF FINANCE, REPRESENTED BY SECRETARY, NORTH BLOCK, NEW DELHI, PIN – 110 001. 2 THE CENTRAL BOARD OF EXCISE AND CUSTOMS, REPRESENTED BY CHAIRMAN, ROOM NO. 227-B, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI, PIN – 110 001. 3 THE ADDITIONAL DIRECTOR GENERAL, GOODS AND SERVICES TAX INTELLIGENCE, KOCHI ZONAL UNIT, CENTRAL EXCISE BHAWAN, KATHRIKADAVU, KALOOR P.O, KOCHI, PIN – 628 017. W.P.(C)No.24617/2022 2 4 THE ADDITIONAL /JOINT COMMISSIONER OF CENTRAL TAX, KOCHI CENTRAL TAX COMMISSIONERATE, CENTRAL REVENUE BUILDING, I.S PRESS ROAD, KOCHI, PIN – 682 108. 5 THE
The judgment continues below.
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