Corporate Bank Guarantee

[SUBHASISH SARKAR]

A Corporate Bank Guarantee has been issued by the Holding Company located in London UK on behalf of its subsidiary in India for availing Working Capital facilities in 2013. My query is, whether GST is applicable in case of BG is issued by an Overseas Entity for its subsidiary in India, whether ITC is available to the beneficiary, ie, the subsidiary, and how invoice will be raised to avail ITC. Also, Whether GST applicable under Rule 28(2) wef 26-10-2023 @ 18% of 1% of BG value for 2023-2024 and every FY thereafter. How will the value be determined prior to 26-10-2023 under rule 28.

AI Summary

Corporate Bank Guarantee GST Applicability and ITC Impact Explored Under Rule 28(2) Amendments Effective October 2023 A corporate bank guarantee issued by a UK-based holding company for its Indian subsidiary raises questions about GST applicability and input tax credit (ITC) availability. The main concerns include whether GST applies to such guarantees, how invoices should be raised for ITC, and the impact of Rule 28(2) effective from October 26, 2023. Responses suggest that before the rule amendment, there might be no GST liability, and full credit eligibility negates the need for an invoice. Interest on delayed GST payment is implied, and recent notifications clarify the inapplicability of Rule 28(2) if full ITC is available.