Muthoot Finance Receives ₹1.52 Crore GST Demand Over Corporate Guarantee
Muthoot Finance has received a Rs. 1.52 crore GST demand over a corporate guarantee, which the company plans to challenge through an appeal.
Muthoot Finance Limited has received a tax demand of over Rs. 1.52 crore from the State Goods and Services Tax Department of Kerala. The notice was issued by the Office of the Deputy Commissioner, Adjudication One, Ernakulam. The demand includes tax, interest, and penalty, all related to a corporate guarantee provided by the company to one of its subsidiaries. According to the...
Muthoot Finance Limited has received a tax demand of over Rs. 1.52 crore from the State Goods and Services Tax Department of Kerala. The notice was issued by the Office of the Deputy Commissioner, Adjudication One, Ernakulam. The demand includes tax, interest, and penalty, all related to a corporate guarantee provided by the company to one of its subsidiaries.
According to the disclosure made by Muthoot Finance, the order was dated June 6, 2025, and was received by the company recently. The order raises a tax demand of Rs. 54 lakh, interest of Rs. 44.22 lakh, and a penalty of Rs. 54 lakh.
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The action was taken under Section 74 of the Central and State GST Acts, which deals with cases involving alleged fraud, misstatement, or suppression of facts.
The dispute centres around a corporate guarantee that Muthoot Finance provided in favour of its subsidiary. The tax authority has considered this guarantee as a taxable service under the GST laws.
Muthoot Finance disagrees with this view. The company believes that the guarantee has been wrongly classified and that the valuation method used to arrive at the tax amount is not correct. It also argues that the guarantee was never actually used by the subsidiary, and therefore should not attract any GST.
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Muthoot Finance has stated that it will appeal against the order and is currently in the process of preparing the necessary documents. The company has mentioned that it finds the allegation made in the order to be without merit.
In its statement, the company also reassured investors and stakeholders that this order does not have any material impact on its financials or day-to-day operations. Muthoot Finance remains confident that the matter will be resolved in its favour through the legal process.
About Muthoot Finance
Muthoot Finance is one of India’s largest non-banking financial companies and the country’s leading gold loan provider. Headquartered in Kochi, Kerala, the company has a wide network of branches across India. It offers personal and business loans secured by gold jewellery along with a range of other financial services such as money transfer, insurance, and microfinance.
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