GST Panel May Allow Transfer of Unutilised ITC Across Group Companies

A key committee operating under the Goods and Services Tax (GST) framework is expected to examine industry proposals aimed at improving tax credit utilization and reducing compliance challenges for businesses. Among the recommendations under consideration is a mechanism that would permit the transfer of unutilised Input Tax Credit (ITC) between eligible entities within the same corporate group.

The panel is also likely to evaluate a proposal seeking exemption from GST on intra-group corporate guarantees, a long-standing demand from businesses. Industry stakeholders believe that these measures could simplify internal financial arrangements, improve working capital efficiency, and support better cash flow management across corporate groups.

Following the committee's review, the recommendations may be submitted to the GST Council for consideration at its upcoming meeting. If approved, the proposed reforms could strengthen the ease of doing business by enabling more efficient use of tax credits while reducing compliance and administrative costs for companies. CA Sansaar