The Government of West Bengal on September 11, 2024, issued a notification related to Clarification on various issues pertaining to taxability and valuation of supply of services of providing corporate guarantee between related persons.
The following has been stated-
•It is to be clarified that the supply of service of providing corporate guarantee to any banking company or financial institution by a supplier to a related recipient, on behalf of the said recipient, was taxable even before the insertion of sub-rule (2) in rule 28 of WBGST Rules with effect from 26th October 2023. Rule 28(2) WBGST Rules is only for determination of the value of the taxable supply of providing corporate guarantee to any banking company or financial institution by a supplier to a related recipient, on behalf of the said recipient and not regarding the taxability of the said supply itself.
•In the service of providing corporate guarantee to any banking company or financial institution by a supplier to a related recipient, on behalf of the said recipient, the supplier of the service is the corporate entity providing the corporate guarantee and the recipient is the related entity for whom the corporate guarantee is provided by the said supplier.
[Circular No. 18/2024]
