Service tax on corporate Guarantee to Group Company

[Prakash Gupta]

Dear Expert,

Need your view on below mentioned query :

Whether Tax will be applicable on Corporate Guarantee give by Holding Company to it Subsidiary Company under the provision of Service Tax as well as GST. Please note that no fees/amount has been charged by the Holding Company for giving Guarantee to its subsidiary Company.

Thanks ,

Pankaj Singh

AI Summary

Taxability of corporate guarantee: GST may apply where related party deemed supply rules treat guarantees as taxable even without consideration.
The core issue is whether a holding company's corporate guarantee to its subsidiary is taxable: one view relies on the consideration requirement to exclude service tax, while another treats guarantees as potentially taxable under GST by analogy to government guarantee guidance and via deemed supply rules for related parties, especially where the recipient can claim input tax credit.