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of <h1>GST Circular Clarifies Taxability of Personal and Corporate Guarantees, Introduces New Sub-Rule in Rule 28 for Uniformity.</h1> The circular addresses the taxability of personal and corporate guarantees under GST. It clarifies that personal guarantees provided by company directors to banks, even without consideration, are considered a supply of service between related parties and are valued at zero for tax purposes unless remuneration is involved. Corporate guarantees provided by related entities or holding companies for subsidiaries are also treated as taxable supplies. The taxable value for corporate guarantees is determined by a newly inserted sub-rule in Rule 28 of CGST Rules, ensuring uniformity. The circular advises issuing trade notices to disseminate this information and requests feedback on implementation difficulties.
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