Bank Guarantee

[Girdhari Yadav]

Is this necessary to give a bank guarantee in auto renewal form for any type of bond.

[KASTURI SETHI]

Surety bond does not require Bank Guarantee. It is to be renewed before the date of expiry of the bond. Security bond requires Bank Guarantee. Without renewal of Bank Guarantee, Security Bond is incomplete. The department always keeps watch to protect revenue.

[DR.MARIAPPAN GOVINDARAJAN]

Bank guarantee is for certain period. If the period expires the bank guarantee also expires. In auto renewal if the period of bank guarantee then fresh bank guarantee is to be given. It is my view.

AI Summary

Understanding Bank Guarantee Requirements for Auto-Renewal of Bonds in Central Excise: Surety vs. Security Bond Rules A participant inquired whether a bank guarantee is necessary for auto-renewal forms related to any type of bond under Central Excise. One respondent clarified that a surety bond does not require a bank guarantee but must be renewed before expiration, whereas a security bond does require a bank guarantee, which is essential for its validity. Another respondent added that bank guarantees are valid for a specific period and must be renewed if expired during auto-renewal. Both emphasized the importance of maintaining valid bank guarantees to protect revenue.