📢 बड़ी राहत Alert! GST on Corporate Guarantees 📢

Dear Business & Professional Community,

एक important judgment में Bombay High Court - Nagpur Bench ने clarification दी है regarding GST on corporate guarantees provided to subsidiary companies without any fee/commission.

🔍 Key Highlights of the Judgment:

Facts: Parent company ने support के तौर पर subsidiary companies को loan secure करने के लिए corporate guarantees दीं। condition यह थी कि no fee, commission or consideration लिया जाएगा।

GST Dept Stand: Tax department का contention था कि rules (especially Rule 28) के तहत, consideration न होने पर भी such transactions taxable होते हैं and based on deemed value, 1% value apply होगी।

Petitioner Stand: Taxpayer ने argue किया कि no consideration = no taxable supply, regardless of rules for calculation. Rule 28(2) constitutional validity भी challenge की।

HC Conclusion: Court ने GST demand quash कर दी। reliance placed on Supreme Court precedent that guarantees without consideration can’t be taxed as a service under GST. Taxpayer win regarding specific demand. But Rule 28 remains for other cases.

✅ Takeaway for business: Specific transactions with zero consideration on guarantees may be protected based on facts. careful evaluation recommended.

Educational purpose only. consult experts for specific advice.

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