Why corporate guarantees have emerged as a new battleground in tax disputes
In October 2024, Jindal Stainless challenged a Goods and Services Tax (GST) notice in the Delhi High Court. It was about corporate guarantees issued to related parties by its former group company, Jindal Stainless (Hisar), before their merger in March 2023.
The tax department argued that these guarantees — extended to banks and financial institutions — qualified as a “supply of services” under GST law, making them liable to 18 per cent tax.
Jindal Stainless contested the taxability of such guarantees, especially when issued without any consideration, and challenged the retrospective application of new rules and circulars.
Read more at: Business Standard
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