TaxTMI 
TaxTMI 
2026 (2) TMI 580
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....MDC, Tadigadapa to Enikepadu, 100 Feet Road, Kanuru (V), Penamaluru (M), Vijayawada, Andhra Pradesh, 521137, (GSTIN No. 37AAACT7391N1ZN) (hereinafter referred to as applicant) has filed an application in FORM GST ARA-01 under Section 97(1) of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively). 2. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and APGST Act, 2017 are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act, 2017 would also mea....
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....ring substantial financial mobilization. 5. Statement of relevant facts having a bearing on the question(s) raised. 1. To finance this expansion, APMDC has raised Rs.9,000 Crores from the debt market for which the Government of Andhra Pradesh has given guarantees to the debenture trustee. 2. As per the letter issued by the Deputy Secretary to the Government, APMDC is liable to pay a Guarantee Commission at 5% on the value of the guarantee provided by GoAP in respect of loans availed through the issuance of debentures. 3. The guarantees furnished by the Government of Andhra Pradesh are in favour of the debenture holders / bond trustees for the debenture instruments issued by APMDC. 4. The applicant proposes to pay guarantee co....
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....le-2, State Office, Kunchanapalli, Guntur District. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the Central Tax authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017. In response, remarks were received from the State jurisdictional officer vide Ref. CCST's Ref. No. SSC-2/37AAACT7391N1ZN/2025, dated 12-11-2025 stating that the applicant, M/s The Andhra Pradesh Mineral Development Corporation Limited is engaged in the business of mining and for expansion of its existing business, the Government of Andhra Pradesh has allotted 436 new mining lease licences to APMDC; that verification of the adjudication orders in Form DRC-07 / DRC-05 available on the APTIS dashb....
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....entral Government, State Government, Union territory to their undertakings or Public Sector Undertakings (PSUs) by way of guaranteeing the loans taken by such undertakings/PSUs from banking companies and financial institutions." 4. The guarantees furnished by the Government of Andhra Pradesh are directly in respect of the loans raised by APMDC from debenture holders/bond trustees. These loans are financial borrowings and are akin to loans from financial institutions. 5. The Guarantee Commission of 5% payable by APMDC to GoAP is nothing but consideration for such guarantee service. Since the service itself is exempt under Entry No. 34A, no GST is payable on the guarantee commission. 6. Further, Circular No. 34/8/2018-GST dated 01.03....
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.... and reiterated the facts narrated in their application. 8. Discussion and Findings: 8.1 The Authority examined the application filed in Form GST ARA-01, the documents placed on record, the applicant's submissions, and the remarks furnished by the jurisdictional State Tax authority. The issue for determination before this Authority is limited to the taxability of the Guarantee Commission payable by the applicant to the Government of Andhra Pradesh in respect of guarantees extended for the debentures raised by the applicant. 8.2 The applicant, M/s The Andhra Pradesh Mineral Development Corporation Limited, is a wholly owned undertaking of the Government of Andhra Pradesh and is engaged in the business of mining. The Government of An....
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.... clarified by the CBIC vide Circular No. 154/10/2021-GST dated 17.06.2021, wherein it has been re-iterated that "guaranteeing of loans by Central or State Government for their undertaking or PSU is specifically exempt under said Entry No. 34A' 8.6 In the present case, it is an admitted fact that the applicant is a State Government undertaking and guarantee for an amount of Rs. 9,000/- Crores has been extended by the Government of Andhra Pradesh vide G.O.Ms.No.33 Industries & Commerce (M.III) Department, dated 12.3.2025 in respect of bonds issued by the applicant subject to payment of Guarantee Commission @ 2% on the guaranteed amount of Rs. 9,000/- Crores. 8.7 In view of the explicit exemption provided under Entry No. 34A of Notificat....