{"id":9506,"date":"2023-10-28T12:33:21","date_gmt":"2023-10-28T11:33:21","guid":{"rendered":"https:\/\/www.klickongstworld.com\/blog\/?p=9506"},"modified":"2023-10-28T12:33:26","modified_gmt":"2023-10-28T11:33:26","slug":"cbic-notifies-valuation-rules-for-corporate-guarantees-between-related-parties","status":"publish","type":"post","link":"https:\/\/www.klickongstworld.com\/blog\/cbic-notifies-valuation-rules-for-corporate-guarantees-between-related-parties\/","title":{"rendered":"CBIC notifies valuation rules for Corporate Guarantees between related parties"},"content":{"rendered":"<p align=\"justify\">The  GST Council, in its 52nd meeting, had recommended to insert sub-rule (2) in  Rule 28 of CGST Rules, 2017, to provide for taxable value of supply of&nbsp;<strong>corporate guarantee<\/strong>&nbsp;provided  between related parties as&nbsp;<strong>one  per cent of the amount of such guarantee offered, or the actual consideration,  whichever is higher<\/strong>.<br \/>\n  Accordingly,  the CBIC has issued&nbsp;<a href=\"https:\/\/www.klickongstworld.com\/uploads\/judgement\/highcourt\/1698387485.pdf\"><strong>Notification No. 52\/2023 Central Tax dated October 26, 2023<\/strong><\/a> to notify the Central Goods and Services Tax  (Fourth Amendment) Rules, 2023 to&nbsp;<em>interalia<\/em>&nbsp;amend  Rule 28 of the CGST Rules by inserting sub rule (2).\n  <\/p>\n<p align=\"justify\"><strong><u>Amended Rule<\/u><\/strong>\n<\/p>\n<p align=\"justify\"><em><strong>&#8220;Rule 28. Value of supply of goods or services or both between  distinct or related persons, other than through an agent.-<\/strong><\/em><\/p>\n<p align=\"justify\"><em>(1) The value of the supply of goods or services or both between  distinct persons as specified in sub-section (4) and (5) of section 25 or where  the supplier and recipient are related, other than where the supply is made  through an agent, shall-<\/em><\/p>\n<p align=\"justify\"><em>(a) be the open market value of such supply;<\/em> <br \/>\n    <em>(b) if the open market value is not available, be the value of  supply of goods or services of like kind and quality;<\/em> <br \/>\n    <em>(c) if the value is not determinable under clause (a) or (b), be  the value as determined by the application of rule 30 or rule 31, in that  order:<\/em><\/p>\n<p align=\"justify\"><em>Provided that where the goods are intended for further supply as  such by the recipient, the value shall, at the option of the supplier, be an  amount equivalent to ninety percent of the price charged for the supply of  goods of like kind and quality by the recipient to his customer not being a  related person:<\/em><\/p>\n<p align=\"justify\"><em>Provided further that where the recipient is eligible for full  input tax credit, the value declared in the invoice shall be deemed to be the  open market value of the goods or services.<\/em><\/p>\n<p align=\"justify\"><em><strong>(2)  Not with standing anything contained in sub-rule (1), the value of supply of  services by a supplier to a recipient who is a related person, by way of  providing corporate guarantee to any banking company or financial institution  on behalf of the said recipient, shall be deemed to be one per cent of the  amount of such guarantee offered, or the actual consideration, whichever is  higher.<\/strong><\/em> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>2022\/06\/cbic-logo-new-1.jpg<\/p>\n","protected":false},"author":1,"featured_media":7535,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/posts\/9506"}],"collection":[{"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/comments?post=9506"}],"version-history":[{"count":1,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/posts\/9506\/revisions"}],"predecessor-version":[{"id":9507,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/posts\/9506\/revisions\/9507"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/media\/7535"}],"wp:attachment":[{"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/media?parent=9506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/categories?post=9506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/tags?post=9506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}