Valuation of corporate guarantees: GST assessed on prescribed annualised percentage or actual consideration per tenure. Supply of corporate guarantees between related persons was taxable prior to Rule 28(2); Rule 28(2) prescribes valuation from 26 October 2023. Valuation for guarantees to banking or financial institutions is the higher of actual consideration and one per cent of the amount guaranteed per annum, multiplied by the guarantee tenure (pro rata for periods under one year). Multiple co guarantors pay on aggregate actual consideration if higher, otherwise proportionately on one per cent of their guaranteed amounts. Domestic guarantors invoice under forward charge; foreign guarantors trigger reverse charge on the Indian recipient. Rule 28(2) excludes recipients located outside India.
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.
Valuation of corporate guarantees: GST assessed on prescribed annualised percentage or actual consideration per tenure.
Supply of corporate guarantees between related persons was taxable prior to Rule 28(2); Rule 28(2) prescribes valuation from 26 October 2023. Valuation for guarantees to banking or financial institutions is the higher of actual consideration and one per cent of the amount guaranteed per annum, multiplied by the guarantee tenure (pro rata for periods under one year). Multiple co guarantors pay on aggregate actual consideration if higher, otherwise proportionately on one per cent of their guaranteed amounts. Domestic guarantors invoice under forward charge; foreign guarantors trigger reverse charge on the Indian recipient. Rule 28(2) excludes recipients located outside India.
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