Corporate Guarantee is taxable as Business Auxiliary Service under Section 65(105)(zzb) of the Finance Act

Last updated: 22 November 2023

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Quick Summary

The Supreme Court has admitted an appeal concerning the taxability of corporate guarantees. Initially, the Revenue Department sought to tax the commission earned on corporate guarantees as 'Banking and other Financial Services'. However, the CESTAT ruled that corporate guarantees should be taxed as 'Business Auxiliary Service' instead. This decision was made because the Revenue Department failed to properly classify the service and lacked certainty in their tax assessment. The Supreme Court's admission of the appeal means this matter will be further reviewed.

Court :
Supreme Court of India

Brief :
Aggrieved by the Impugned Order, the Appellant filed Civil Appeal before the Hon’ble Supreme Court of India [Civil Appeal No. 2406-2407 of 2022] which has been admitted vide Order dated November 3, 2023.

Citation :
Civil Appeal No. 2406-2407 of 2022

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1999

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4999

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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