CBIC Issued Clarification on Taxability and Valuation of Supply of Services of Providing Corporate Guarantee Between Related Persons
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- Last Updated on 15 July, 2024
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Circular No. 225/19/2024 – GST dated July 11th, 2024
The CBIC has received various representations from trade and industry seeking clarifications on various issues pertaining to the taxability and valuation of supply of services of providing corporate guarantee between related persons. Therefore, the CBIC has issued circular to provide clarity regarding the applicability of Rule 28(2) which is amended retrospectively with effect from 26th October 2023.
It is also clarified that in respect of supply of services of providing corporate guarantee between related persons, in respect of corporate guarantee issued or renewed before 26th October 2023, the valuation of the said supply is to be done in accordance with Rule 28, as it existed during that time. However, if the corporate guarantee is issued or renewed on or after 26th October 2023, then the valuation of the said supply will be required to be done as per Rule 28(2) of CGST Rules.
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