TaxTMI 
TaxTMI 
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.
Corporate Bank Guarantee
20 Feb 2025 
8 Replies 
1842 Views Asked by
GST on corporate guarantees: valuation and ITC treatment clarified, limited relief where exports or full input credit apply.
GST liability on corporate guarantees depends on whether the guarantee is a taxable supply and the recipient's ITC eligibility; from 26 10 2023 a prescribed valuation method applies to intra group guarantees, while notifications and circulars exclude the concessional valuation where exports are involved or the recipient is eligible for full input tax credit. Interest for delayed payment is payable under general interest provisions and the time of liability follows time of supply rules. (AI Summary)
GST liability on corporate guarantees depends on whether the guarantee is a taxable supply and the recipient's ITC eligibility; from 26 10 2023 a prescribed valuation method applies to intra group guarantees, while notifications and circulars exclude the concessional valuation where exports are involved or the recipient is eligible for full input tax credit. Interest for delayed payment is payable under general interest provisions and the time of liability follows time of supply rules. (AI Summary)