𝗦𝘂𝗽𝗿𝗲𝗺𝗲 𝗖𝗼𝘂𝗿𝘁 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗼𝗻 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗚𝘂𝗮𝗿𝗮𝗻𝘁𝗲𝗲𝘀 📢 𝗧𝗵𝗲 𝗖𝗼𝘂𝗿𝘁 𝗵𝗲𝗹𝗱: "Service tax cannot be levied on corporate guarantees in the absence of consideration, as the activity does not meet the criteria for taxability under the Finance Act, 1994."

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗣𝗮𝗿𝘁𝗶𝗲𝘀: Commissioner of CGST and Central Excise vs. M/s Edelweiss Financial Services Ltd. 𝗜𝘀𝘀𝘂𝗲: Whether service tax is leviable on corporate guarantees? 𝗔𝗰𝘁𝗶𝘃𝗶𝘁𝘆: The respondent issued corporate guarantees on behalf of subsidiaries without charging consideration. The revenue claimed taxability akin to bank guarantees.

⚖️ 𝗝𝘂𝗱𝗴𝗲𝗺𝗲𝗻𝘁: The Court ruled that corporate guarantees were excluded from "banking and other financial services" pre-2012 under Section 65(12) of the Finance Act. Post-2012, taxability required a service provider and consideration, which corporate guarantees lacked. The appeal was dismissed, confirming no service tax liability on corporate guarantees.

𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗧𝗶𝘁𝗹𝗲: Commissioner of CGST and Central Excise vs. M/s Edelweiss Financial Services Ltd. 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 17 March 2023 📜 This ruling reinforces that absence of consideration precludes the imposition of service tax on corporate guarantees.