Bombay High Court Holds Corporate Guarantees Without Consideration Not Taxable Under GST; Upholds Validity of Rule 28(2) Amendment
The Bombay High Court has ruled that the issuance of corporate guarantees by a company to its subsidiaries without any consideration does not constitute a taxable supply of service under the CGST Act, 2017. However, the Court upheld the constitutional validity of the amendment inserting Rule 28(2) in the CGST Rules, 2017, declining to declare it ultravires.
