Held - The writ petitioner furnished corporate guarantee in favour of a related party, namely, M/s.Amman Try Trading Company Private Limited.

The specific stand of the writ petitioner is that they did not receive any consideration for furnishing such corporate guarantee. However, the assessing officer held that supply of such service of corporate guarantee by the petitioner to t.....

Held - The assessee / writ petitioner herein had contended that since the recipient is eligible for full ITC and the writ petitioner did not issue any invoice, and value of transaction has been taken as zero, the aforesaid circulars are applicable to the transactions in question. However, the assessing officer did not consider the applicability of these 2 circulars at all. It is a well settled principle of administ.....

Held - This issue is pending before the several High Courts. The Delhi High Court has in fact granted a stay that no coercive action shall be taken against the Petitioner in case a final assessment order is passed or a demand is created. The Telangana High Court has stayed the effect and operation of the circular dated 27th October 2023. Even the Punjab and Haryana High Court has stayed the effect and operation of the impugned circular 27th Oc.....

Held – Even assuming for the sake of argument that the activity of providing a corporate guarantee by the petitioner to its subsidiaries or related parties is a supply of service, it is not a intrastate supply attracting the provisions of the State and the Central GST laws, but is an interstate supply which would attract the provisions of IGST Act. We must add here that, it is also the case of the Petitioner that the providing of the cor.....

Held - Meanwhile, effect and operation of the impugned Circular dated 27.10.2023 (Annexure P-2) relating to Item No. 2 shall remain stayed and the Appellate Authority shall be free to decide the case of the petitioner without being influenced by the Clarification.

Held – That the provision of Corporate Guarantee is in the nature of a contingent contract which is not enforceable till the guarantee is enforced by the entity to which the guarantee is provided. He further submits that the value of enforcement is not dependent on the value of the guarantee and it is only where the guarantee is enforced that the issue of service may arise, if at all and as such fixing a value at 1% of the Corporate Guar.....