GST circular working note

Circular 204/16/2023-GST: Clarification on issues pertaining to taxability of personal guarantee and corporate guarantee in GST

Source-led decode of CBIC Circular 204/16/2023-GST with the actual provisions, rules, forms and official PDF trail.

Reviewed by CA Nikhil Gupta · Updated 5 October 2026

Filing identity

Circular number

204/16/2023-GST

Date

2023-10-27

CBIC record

1003187

PDF source

official text PDF; 6 page(s)

Download Circular 204/16/2023-GST PDF

Form in 2 minutes

Circular 204/16/2023-GST deals with clarification on issues pertaining to taxability of personal guarantee and corporate guarantee in GST. Read it as a rate, classification and taxability mapping: identify the supply, supplier, recipient, tariff or service description, notification entry and event date before applying the circular. The circular is binding administrative clarification under the GST framework only to the extent of the issue it answers; the Act, Rules, notifications and event-date version still control the final legal result.

Working point: On the issue of clarification on issues pertaining to taxability of personal guarantee and corporate guarantee in GST, a practitioner should match the product or service facts to the circular's described entry instead of extending the answer to nearby supplies by label alone.

Bare law, rules and notifications

Sections extracted

Section 168 (1)
Section 15
Section 7

Rules extracted

Rule 28

Forms extracted

No GST form was expressly extracted from Circular 204/16/2023-GST.

Notifications and linked circulars

Notification No. 52/2023

The source map above is limited to citations actually extracted from the official Circular 204/16/2023-GST PDF. Where the transaction also touches another charging section, exemption entry, return rule or limitation provision, document that separate source before filing or advising.

Paragraph-wise decode

Para	Issue dealt with in the circular
2	In order to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies the issues as under: S. No. Issue Clarification
1	Whether the activity of providing personal guarantee by the Director of a company to the bank/ financial institutions for sanctioning of credit facilities to the said company without any consideration will be treated as a supply of service or not and wheth er the same will attract GST or not. As per Explanation (a) to section 15 of CGST Act, the director and the company are to be treated as related persons. As per clause (c)...
2	Whether the activity of providing corporate guarantee by a person on behalf of another related person, or by the holding company for sanction of credit facilities to its subsidiary company, to the bank/ financial institutions, even when made without any consideration will be treated as a taxable supply of service or not, and if taxable, what would be the valuation of such supply of services. Where the corporate guarantee is...
3	It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
4	Difficulties, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow. (Sanjay Mangal) Principal Commissioner (GST)

Use these paragraph cues to locate the operative part quickly, then read the full official PDF for conditions, exceptions, examples, effective dates and past-period regularisation language.

Workflow

Identify issue.
Record the taxpayer, supply, return period, order or refund event covered by Circular 204/16/2023-GST.
Map source.
Open the circular PDF with the Act, Rule and notification entries listed above.
Compile proof.
Contract, invoice description, product literature, HSN/SAC support, rate notification, exemption condition and tax-position memo.
Close filing.
Use the portal or officer channel that matches the event date and keep the acknowledgement with the source PDF.

Forms and downloadable source

Circular 204/16/2023-GST does not prescribe a separate static form PDF in its extracted source text. The operative document for this page is the circular PDF and the applicable Act, Rule, notification or portal process.

Do not use a form title by memory alone. Confirm the live portal, the rule that prescribes the form, historical return period and any officer instruction before upload or reply.

Highlighted advisory points

Scope

Circular 204/16/2023-GST should be confined to clarification on issues pertaining to taxability of personal guarantee and corporate guarantee in GST; nearby issues require their own source check.

Evidence

Keep the official PDF, transaction documents and portal record together so a reviewer can reproduce the conclusion.

Version

For historical periods, use the law and portal version applicable to the event, not merely the current screen label.

Exam and advisory case study

For exams and opinions, write the classification path: facts, statutory entry, notification condition, circular clarification, past-period treatment and practical billing result. For Circular 204/16/2023-GST, a complete answer names the issue, lists the controlling provisions extracted above, applies the circular's operative answer, and then states what the taxpayer or officer must do in the return, refund, appeal, billing or record file.

Finin2min summary and Q&A

Summary: Circular 204/16/2023-GST is a source-specific GST clarification on clarification on issues pertaining to taxability of personal guarantee and corporate guarantee in GST. Use the exact official PDF, not a generic circular checklist, and preserve the law/rule/notification map with the working file.

Is the circular itself the full law?

No. It clarifies administration under GST. The Act, Rules, notifications, court orders and facts of the transaction remain necessary.

When is a form PDF needed?

Only when the circular or linked rule actually points to a prescribed form. If the page lists forms, use the form compendium and the current GST portal version.

Can this be applied to another tax period?

Only after checking the effective date, amendment history and any past-period regularisation language in the official circular and related notification.

Primary official sources

CBIC circular metadata | Official CBIC PDF viewer | CBIC circular list | GST Council circulars

This Finin2min page is an educational working note. Official legislation, Gazette instruments, circulars, portal rules, court decisions and the facts of the matter prevail. Obtain professional advice for a live filing, refund, appeal or dispute.