Corporate guarantee taxation under GST was remitted for fresh consideration, with the rest of the assessment left intact.

Corporate guarantee transactions under assessment under Section 73 of the Tamil Nadu GST Act were treated as requiring limited interference, because the main tax demand stemmed from that issue and the assessee's contention that only 1% of turnover was taxable was not seriously disputed. Relying on GST circulars and an earlier High Court decision, the Court set aside the assessment only to the extent it dealt with the corporate guarantee matter and remitted that issue for fresh consideration. The assessee was to be given an opportunity to file a reply and additional documents, while the remaining findings in the assessment order were left undisturbed.

---

---

Issues: Whether the assessment order warranted interference insofar as it treated the corporate guarantee transaction as taxable on the entire turnover, and whether the matter required remand for fresh consideration on the assessee's objection that only 1% of the turnover was liable to tax.

Analysis: The impugned order was an assessment under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017. The Court found that the major part of the tax demand arose from the corporate guarantee issue, and the assessee's contention that only 1% of the turnover could be taxed was not seriously disputed. The assessee also relied on GST circulars and an earlier decision of the Court supporting its stand. In these circumstances, the Court considered it appropriate to set aside the assessment order to the extent it dealt with the corporate guarantee issue and to remit that issue for fresh consideration after giving the assessee an opportunity to file a reply and additional documents.

Conclusion: The assessment order was interfered with only on the corporate guarantee issue, and the matter was remitted for fresh adjudication on that issue alone, while the remaining findings were left undisturbed.

---