Guarantee taxability: personal guarantees are supplies but taxable value nil without consideration; corporate guarantees valued under related party rule. A director's provision of a personal bank guarantee is treated as a supply of service between related persons even if without consideration; valuation follows related-party valuation and, where banking guidelines forbid payment to guarantors, the open market value may be treated as nil so the taxable value is zero, except in exceptional cases where remuneration is actually paid, in which case the taxable value equals such remuneration. Corporate guarantees between related entities, including holding-subsidiary, are also supplies and their taxable value is determined under the related-party valuation sub-rule introduced for corporate guarantees.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Guarantee taxability: personal guarantees are supplies but taxable value nil without consideration; corporate guarantees valued under related party rule.
A director's provision of a personal bank guarantee is treated as a supply of service between related persons even if without consideration; valuation follows related-party valuation and, where banking guidelines forbid payment to guarantors, the open market value may be treated as nil so the taxable value is zero, except in exceptional cases where remuneration is actually paid, in which case the taxable value equals such remuneration. Corporate guarantees between related entities, including holding-subsidiary, are also supplies and their taxable value is determined under the related-party valuation sub-rule introduced for corporate guarantees.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
TaxTMI 
