Related-party guarantee treated as supply: corporate guarantees valued under prescribed related-party valuation rules, personal guarantees valued per remuneration rules. Personal bank guarantees by directors are supplies of service between related persons; where regulatory banking guidance forbids consideration, the open market value may be treated as nil and the taxable value as zero, except in exceptional cases where remuneration is paid. Corporate guarantees by related companies or by holding companies for subsidiaries are also supplies of service and their taxable value must be determined under the statutory valuation provision for related-party guarantees, applied uniformly irrespective of input tax credit availability. The corporate-guarantee valuation rule does not apply to director personal 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.
Related-party guarantee treated as supply: corporate guarantees valued under prescribed related-party valuation rules, personal guarantees valued per remuneration rules.
Personal bank guarantees by directors are supplies of service between related persons; where regulatory banking guidance forbids consideration, the open market value may be treated as nil and the taxable value as zero, except in exceptional cases where remuneration is paid. Corporate guarantees by related companies or by holding companies for subsidiaries are also supplies of service and their taxable value must be determined under the statutory valuation provision for related-party guarantees, applied uniformly irrespective of input tax credit availability. The corporate-guarantee valuation rule does not apply to director personal guarantees.
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