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The applicability of GST on corporate guarantees has always been a contentious issue. The first issue was whether there was any service involved in the provision of corporate guarantees.

Judicially, under the erstwhile service tax regime, the courts have indirectly indicated that there is an element of service involved in the provision of corporate guarantees. The same view has also been coming forth from the jurisprudence established under the Income Tax Act, 1961.

Thus, as there is a...