Punjab & Haryana HC stays CBIC Circular on taxability of Corporate Guarantee between related persons

Punjab and Haryana High Court stays CBIC Circular dated 27.10.2023, to the extent it clarifies that corporate guarantee (CG) provided by a company to a bank/ financial institutions providing credit facilities to the other company, where both companies are related, even when made without any consideration, is to be treated as a supply of service between related parties as per provisions of Schedule I of CGST Act, 2017.

The matter is before Justice Sanjeev Prakash Sharma and Justice Sukhvinder Kaur.

Sr. Advocate Sujit Ghosh along with Advocates Mannat Waraich, Anshika Agarwal (from CSG-Legal) and Advocate Abhinav Sood are appearing on behalf of Petitioner, whereas Revenue is being represented by Advocate Rishabh Kapoor.