GST on Corporate Guarantee- Books Value or 1% ?

[khushboo Doshi]

What would be the valuation adopted for Corporate Guarantee purposes, if the accounting is done at a rate higher than specified under GST (i.e. more than 1%). Would GST still be payable at 1% of sanctioned amount or on such higher percentage as per books of accounts?

Please note no payment has been made for corporate guarantee fees.

[KASTURI SETHI]

See Circular No. 225/19/2024-GST [F. NO. CBIC-20001/4/2024 - GST]

AI Summary

Corporate guarantee valuation under GST raises whether tax applies at 1% or the higher book rate. Valuation of corporate guarantee under GST is questioned where the books of account record a rate higher than the prescribed percentage. The issue is whether GST should be payable at 1% of the sanctioned amount or at the higher percentage reflected in the accounts when no corporate guarantee fee has been paid. The discussion concerns the correct valuation basis for corporate guarantee services under GST.