service tax on performance gaurentee
This query is : Resolved
15 February 2010
hi
i hav an quarry
is service tax is appliacble on performance gaurantee
i hav an quarry
is service tax is appliacble on performance gaurantee
15 February 2010
Are you asking Bank charges for issuing performance guarantee, on that service tax or some other
24 July 2025
Regarding **service tax on performance guarantee** in the context of your quarry:
---
### What is Performance Guarantee?
Performance Guarantee (PG) is usually a contractual assurance given by a party (like a bank or guarantor) to ensure the completion or performance of certain obligations.
---
### Service Tax Applicability:
* **If the performance guarantee is provided by a bank or financial institution** (like a bank guarantee), **service tax is applicable on the commission or fee charged for issuing the guarantee**.
This service falls under the category of **Banking and Financial Services** and is taxable.
* **If the performance guarantee is given as part of your contractual obligation (without charging a separate fee or commission), then no service tax is applicable on the guarantee itself.**
* If you, as a quarry owner, are receiving a performance guarantee from someone, it does not attract service tax on your part unless you provide some taxable service.
---
### Summary:
* Service tax applies **on the fee or commission charged for issuing performance guarantee by banks/financial institutions.**
* No service tax on the guarantee itself if given without consideration.
* If you provide a guarantee service for others (charging a fee), then service tax may apply on that fee.
---
If you want, I can help you with detailed references or sample clauses. Does that help?
---
### What is Performance Guarantee?
Performance Guarantee (PG) is usually a contractual assurance given by a party (like a bank or guarantor) to ensure the completion or performance of certain obligations.
---
### Service Tax Applicability:
* **If the performance guarantee is provided by a bank or financial institution** (like a bank guarantee), **service tax is applicable on the commission or fee charged for issuing the guarantee**.
This service falls under the category of **Banking and Financial Services** and is taxable.
* **If the performance guarantee is given as part of your contractual obligation (without charging a separate fee or commission), then no service tax is applicable on the guarantee itself.**
* If you, as a quarry owner, are receiving a performance guarantee from someone, it does not attract service tax on your part unless you provide some taxable service.
---
### Summary:
* Service tax applies **on the fee or commission charged for issuing performance guarantee by banks/financial institutions.**
* No service tax on the guarantee itself if given without consideration.
* If you provide a guarantee service for others (charging a fee), then service tax may apply on that fee.
---
If you want, I can help you with detailed references or sample clauses. Does that help?
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