Taxation of Corporate Guarantees under GST - Light At The End Of The Tunnel?
The taxation of corporate guarantees, under Indian Indirect tax regimes, has travelled through a long and contested path. What began as a mere conceptual debate under the service tax regime has, under GST, evolved into a complex interplay between statutory provisions, valuation rules, circulars and judicial interpretation. The recent decision of the Bombay High Court in M/s D.P. Jain & Co. Infrastructure Pvt. Ltd. v. Union of India [TS-333-HC(BOM)-2026-GST] marks an important milestone in this journey. This judgement not only grants relief to taxpayers but also it reasserts foundational principles governing taxability. Let us analyze the background of the issue, history and the implications of this recent judgement.
