Valuation of corporate guarantee: annual deemed value or actual consideration governs GST liability on issuance and renewals. For guarantees issued or renewed on or after the amendment, valuation of the service of providing a corporate guarantee to a banking company or financial institution for a related recipient is the higher of actual consideration and a deemed annual benchmark based on the amount guaranteed multiplied by the number of years the guarantee covers; proportionate valuation applies for periods shorter than a year, and tax is payable on issuance and on each renewal. The value is determined by the amount guaranteed irrespective of actual loan disbursal, and where full input tax credit is available the invoice value is deemed the value of supply.
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 guarantee: annual deemed value or actual consideration governs GST liability on issuance and renewals.
For guarantees issued or renewed on or after the amendment, valuation of the service of providing a corporate guarantee to a banking company or financial institution for a related recipient is the higher of actual consideration and a deemed annual benchmark based on the amount guaranteed multiplied by the number of years the guarantee covers; proportionate valuation applies for periods shorter than a year, and tax is payable on issuance and on each renewal. The value is determined by the amount guaranteed irrespective of actual loan disbursal, and where full input tax credit is available the invoice value is deemed the value of supply.
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