Corporate guarantee valuation under GST clarified: tax applies on guaranteed amount, with annual computation and ITC treatment explained. Clarification is issued on the taxability and valuation of corporate guarantee services between related persons under GST. The circular explains that the service was taxable even before Rule 28(2), that valuation is based on the amount guaranteed rather than the loan actually disbursed, and that input tax credit remains available subject to the Act and Rules. It also addresses co-guarantors, takeover of loans, forward charge and reverse charge treatment, annual valuation, deemed invoice value where full input tax credit is available, and non-applicability to export of such services.
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Corporate guarantee valuation under GST clarified: tax applies on guaranteed amount, with annual computation and ITC treatment explained.
Clarification is issued on the taxability and valuation of corporate guarantee services between related persons under GST. The circular explains that the service was taxable even before Rule 28(2), that valuation is based on the amount guaranteed rather than the loan actually disbursed, and that input tax credit remains available subject to the Act and Rules. It also addresses co-guarantors, takeover of loans, forward charge and reverse charge treatment, annual valuation, deemed invoice value where full input tax credit is available, and non-applicability to export of such services.
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