Tax & GST24 Sept 2026
GST Council Clarifies Corporate Guarantee Taxation & E-Way Bill Norms for MSMEs
Source: Central Board of Indirect Taxes and Customs (CBIC)
Key clarifications announced for parent-subsidiary corporate guarantees, lowering dispute triggers for SME groups across manufacturing and services.
In its latest session, the GST Council clarified Rule 28(2) concerning valuation of corporate guarantees between related entities. The deemed value will be pegged at 1% of the guaranteed sum or actual consideration, whichever is higher, per annum. This clarity resolves long-standing litigation for conglomerate groups and private limited enterprises.