Page 16 - BANKING FINANCE NOVEMBER 2023

ROUNDUP

has been granted approval from SEBI of a PIL on the issue. The top court had, lakh crore in FY22 and 13.8 lakh crore
for administration and supervision of on August 6, 2021, issued notices to in FY23. So, they added less financial
Investment Advisers (IAs). At present, the Centre and the Goods and Services assets to their portfolio than in the
there are around 900 BASL registered Tax (GST) Council on the public inter- previous year and the year before, but
members. est litigation (PIL) matter filed by law- it is important to note that their over-
yer-activist Amit Sahni. all net financial assets are still grow-
Corporate loan guarantee A bench comprising Chief Justice D Y ing," the ministry said on
Chandrachud and Justices J B Pardiwala microblogging site X, rejecting criticism
by parent to attract 18% that household savings had dipped.
and Manoj Misra was told by Attorney
GST General R Venkataramani that the It said households added financial as-
A parent company's corporate guaran- Union finance ministry issued a notifi- sets by a lesser magnitude than in the
tee to its subsidiary for a bank loan will cation on September 14 and the pro- previous years because they have now
attract 18 per cent GST, the GST Coun- cess of setting up the tribunals has started taking loans to buy real assets.
cil clarified. However, there will be no commenced. "RBI data on personal loans provides
GST if a director provides a personal The bench asked the attorney general us with evidence. Personal loans given
guarantee for a loan from a bank or whether the tribunals have become by banks have several components. Key
any financial institution to his/her own functional. The topmost law officer in among them are real estate loans and
company. the country said the process is on. The vehicle loans," said the ministry.

The council also recommend an am- bench disposed of the PIL and assured
nesty scheme if an appeal is filed late, senior advocate Mahabir Singh, who Large companies get flex-
besides amending rules for the ap- appeared in the court on behalf of the ibility in raising debt funds
pointment of president and members petitioner, that he may come back if SEBI approved a proposal to provide
of the GST Appellate Tribunal. How- the tribunals are not made functional. flexibility in the framework for large
ever, there is no change in recommen-
corporates (LCs) for meeting their in-
dation related to the 28 per cent GST cremental financing needs through is-
on the full face value for online money No stress in households suance of debt securities.
gaming, casinos and horse racing. savings, says finance min-
The regulator in its board meeting
"When the corporate guarantee is istry held announced a set of measures to
given by a director to a company then
There is no distress in household savings provide flexibility to the existing LC
the value of service will be deemed to
as is being discussed in some circles, the framework. It had issued a consultation
be zero, hence no tax," Revenue Sec- finance ministry said, asserting that paper in August this year on 'Review
retary Sanjay Malhotra said at a press
data indicates that changing consumer of framework for borrowings by Large
conference to announce the recom-
preferences for different financial prod- Corporates'.
mendations of the 52nd meeting of the ucts is the real reason for the overall
GST Council under the Chairpersonship "A higher monetary threshold has
picture of household savings. been specified for defining LCs, thereby
of Finance Minister Nirmala
Sitharaman in the national capital. Citing data, the ministry said between reducing the number of entities quali-
June 2020 and March 2023, the stock fying as LCs," SEBI said.
of household gross financial assets The current threshold for the criteria
GST tribunal formation went up by 37.6%, and the stock of of outstanding long-term borrowings
process starts household gross financial liabilities for the purpose of identifying any en-
The Supreme Court took note of the went up by 42.6% - a minimal differ- tity as LC is Rs 100 crore or above.
Centre's submissions that the process ence between the two. SEBI, in the consultation paper, had
of setting up the national and regional "Households added net financial assets proposed the threshold to be increased
GST tribunals has started and disposed of 22.8 lakh crore in FY21, nearly 17 to Rs 500 crore or above. T

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