Export of service: corporate guarantees issued without consideration can qualify as zero rated where RBI permits non receipt of payment.
Corporate guarantees issued without charging commission to foreign related parties are deemed supply under Schedule I; valuation for GST must use open market value under Section 15 and Rule 28(1). Although Section 2(6) of the IGST Act ordinarily requires receipt of payment for export of service, Rule 96A and FEMA/RBI permissions allowing non receipt of consideration enable such deemed supplies to be treated as zero rated exports under LUT, provided RBI permits the non receipt and OMV valuation and invoicing requirements are complied with. (AI Summary)