Services of extending corporate guarantee without any consideration is not considered as a service

Sowar Pvt Ltd Vs Commissioner of Service Tax (CESTAT Delhi)

CESTAT, New Delhi in Sowar Pvt. Ltd. v. Commissioner of Service Tax [Final Order No. 50607 Of 2023 dated March 29, 2023] held that no service tax is payable as the assessee did not receive any consideration for providing a corporate guarantee.

Facts:

M/s. Sowar Pvt. Ltd. (“the Appellant”) is providing services of repair and maintenance, installation service, renting of immovable property etc.

The Revenue Department verified the records for the period 2010-11 to 2014-15 and observed that the Appellant has given corporate guarantee on behalf of their associate enterprises M/s. Scintrex Geo Physical Services (India) Pvt. Ltd. and M/s. HGS India Ltd., to Syndicate Bank.

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