Gujarat High Court upholds GST levy on providing Corporate Guarantees but reads down the deemed 1% valuation under Rule 28(2)
The Gujarat High Court held that corporate guarantees furnished by holding companies on behalf of their subsidiaries constitute a taxable supply of service under GST. While upholding the validity of Rule 28(2), the Court reads down the phrase “whichever is higher” that resulted in a mandatory higher valuation. The Court further held that GST cannot be levied on corporate guarantees for the period prior to 26.10.2023.