GST Update: CBIC issues notification pertaining to valuation of Corporate Guarantee and refund of IGST paid on supplies made to SEZ unit
by Rein Heads | Oct 27, 2023
| Dear All,
The Goods and Services Tax Council (‘the GST Council’) in its 52nd council meeting held on 7 October 2023 recommended certain amendments in the GST legislation with respect to valuation of the corporate guarantee provided to banking and financial institutions by registered person on behalf of its related party.
Further, the GST Council also recommended to amend the Notification No. 01/2023- Integrated Tax dated 31 July 2023 (‘the Original Notification’) to align the provisions of refund for supplies made to Special Economic Zone (‘SEZ’) unit which are meant for authorized operations.
In this regard, the Central Government has issued Notification No. 52/2023-Central Tax and Notification No. 5/2023-Integarted Tax both dated 26 October 2023 to give effect to the above recommendations. The key changes implemented through the notifications are summarized hereinbelow:
| Notification No. |
Amendments
|
Effective date of Amendments
|
|
52/2023-
Central Tax
|
Amended Rule 28 of the Central Goods and Services Tax Rules, 2017 (‘the CGST Rules 2017’) which provides for valuation of supply of goods and services between related parties
New sub rule has been added in Rule 28 providing that the value of corporate guarantee provided by registered person on behalf of its related party would be higher of the following:
- 1% of the value of the corporate guarantee provided; or
- The actual consideration
|
26 October 2023
|
|
05/2023- Integrated Tax
|
Amendments made to the Original Notification for providing that all supplies made to a Developer or a SEZ units for their authorized operations (except for goods notified in the Original Notification) can be made upon payment of IGST which are meant for authorized operations and IGST paid shall be eligible for refund
|
1 October 2023
|
A copy of the Notifications is attached herewith for your reference. |
