Corporate guarantee gst
This query is : Resolved
23 October 2024
What is the applicability of GST on corporate guarantee, is it compulsory requirement
23 October 2024
Corporate guarantees are considered a supply of services under GST. Corporate guarantees provided by a company to its related parties (e.g., subsidiaries, associates) or third parties are considered taxable at 18% rste. Guarantees provided by banks, financial institutions, and insurance companies are exempt from GST.
Circular No. 225/19/2024-GST: This circular clarified that the taxable value of a corporate guarantee provided to a banking company or financial institution on behalf of a related recipient should be calculated at 1% of the guaranteed amount per annum or the actual consideration, whichever is higher.
Notification No. 12/2024-CT: This notification further clarified that the taxable value of a corporate guarantee should be calculated based on the above-mentioned formula, regardless of whether full input tax credit (ITC) is available to the recipient of the services or not.
Circular No. 225/19/2024-GST: This circular clarified that the taxable value of a corporate guarantee provided to a banking company or financial institution on behalf of a related recipient should be calculated at 1% of the guaranteed amount per annum or the actual consideration, whichever is higher.
Notification No. 12/2024-CT: This notification further clarified that the taxable value of a corporate guarantee should be calculated based on the above-mentioned formula, regardless of whether full input tax credit (ITC) is available to the recipient of the services or not.
23 October 2024
As a private limited company, we have given guarantee to another company for availing loan from bank. In this situation is there any gst applicability
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23 October 2024
Yes, as stated above...
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