This trade circular clarifies various issues related to taxability and valuation of supply of services...

This trade circular clarifies various issues related to taxability and valuation of supply of services involving corporate guarantees provided between related persons. Key points are: Corporate guarantees issued before 26.10.2023 will be valued as per pre-amended rules, while those issued/renewed after will follow the new sub-rule (2) of Rule 28. Valuation is based on the guaranteed amount, not the actual loan disbursed. For co-guarantors, GST is payable proportionately on 1% of respective guaranteed amounts. For intra-group guarantees, GST is payable under forward charge by the guarantor entity. For guarantees of fixed tenure, 1% of guaranteed amount per annum or actual consideration, whichever is higher, is the taxable value. The second p..... .....

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