Bombay HC affirms that GST is not applicable on corporate guarantees issued without consideration
The Petitioner is engaged in the business of construction of national and state highways under NHAI projects (HAM / TOT model), and, in the course of its business, furnished corporate guarantees in favour of banks to secure term loans sanctioned to its subsidiary/SPV companies executing the projects. In connection with such financial arrangements, the Petitioner executed three corporate guarantees between 2020 and 2022 in favour of State Bank of India and Bank of Maharashtra. Each of the corporate guarantees specifically stipulated that no security, fee, commission, or any other consideration was received or would be received by the Petitioner for providing such guarantees.