The Directorate General of Goods and Services Tax Intelligence (DGGI) seeks tax on corporate guarantees. -> The DGGI has sent tax demand notices to several local corporate houses over corporate guarantees given on behalf of their subsidiaries.

-> The notices were sent to at least 14 companies, including automakers, FMCG and electronic goods companies. ->The DGGI said the practice of providing corporate guarantees is a "service" liable for taxation under GST.

->The tax authorities are seeking GST dues from the local units of multinational companies (MNCs) under the reverse charge mechanism. -> The tax demand amount is not very high, but companies that received such notices have raised objections and are seeking legal opinion.

-> Officials estimate the cumulative sum of demand notices sent in the last two months to be Rs 600-700 crore. -> The DGGI is arguing that the provision of a corporate guarantee is a "service" under GST because it is a benefit provided by the parent company to the subsidiary.

-> The tax authorities are also arguing that the corporate guarantee is a "supply" under GST because it is a transaction that takes place between two related parties.

-> The companies that have received tax demand notices are arguing that the provision of a corporate guarantee is not a "service" or a "supply" under GST because it is not a commercial transaction.

-> The companies are also arguing that the tax demand notices are unfair because they were not given any prior notice of the tax liability.

-> The issue of whether or not the provision of a corporate guarantee is a taxable event under GST is still being debated. The Supreme Court is currently hearing a case on this issue, and a ruling is expected in the coming months.

-> In the meantime, the tax authorities are continuing to send tax demand notices to companies that have provided corporate guarantees.

-> The companies that have received these notices are facing a difficult decision: they can either pay the tax, challenge the tax demand in court, or try to negotiate a settlement with the tax authorities.