The Central Board of Indirect Taxes and Customs (CBIC) has issued a notification, amending the Goods and Services Tax Rules, 2017 to facilitate valuation of corporate guarantees between related parties in furtherance of the Goods and Services Tax (GST) Council recommendations.
The notification no 52/2023 dated 26th October 2023 stated: –
“In the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), rule 28 shall be renumbered as sub-rule (1) and after the sub-rule as so renumbered, the following sub-rule shall be inserted, namely:-
(2) Notwithstanding 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.”
The notification also made the following amendments to the existing Central Goods and Services Tax Regime: –
Amendment to Rule 142: In sub-rule (3), the wording is changed from “the proper officer shall issue an order” to “the proper officer shall issue an intimation.”
Amendment to Rule 159: In sub-rule (2), a new clause is inserted, specifying that the period of one year from the date of issuance of an order under sub-rule (1) is the expiration date for certain purposes.
Amendment to FORM GST REG-01: A new clause “(xiva) One Person Company” is added after clause (xiv).
Replacement of FORM GST REG-08: FORM GST REG-08 is substituted with a new format for orders of cancellation of registration as a Tax Deductor at source or Tax Collector at source. It provides different scenarios for cancellation, including reasons for cancellation and the effective date.
Amendment to FORM GSTR-8: Changes are made to serial numbers 5, 7, and 9, which relate to interest, late fees, and debit entries in the cash ledger for TCS.
Amendment to FORM GST PCT-01: Changes are made to Part-B of the form, specifically to serial number 4, which details the enrollment options available for various professionals and degree holders.
Amendment to FORM GST DRC-22: A new paragraph is inserted, specifying the cessation of effect for the order issued in this form upon the issuance of an order in FORM GST DRC-23 by the Commissioner or after one year from the date of issuance of this order, whichever is earlier.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
