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2019 (6) TMI 1108 - AAR - GSTValuation of supply of goods and services - Determination of value of supply of goods on the transactions between the distinct entities - valuation on the basis of cost of production - fluctuation of cost of production - cost of production depending on cost of inputs and input services - distinct entities/distinct persons - HELD THAT:- As per the scheme of GST, tax is payable on ad-valorem basis and taxable value is the transaction value i.e. the price actually paid or payable, provided the supplier and recipient are not related and the price is the sole consideration. In the case at hand, the factory, the depots located in different states sharing common PAN but different GST registrations are distinct person as specified in subsection (4) of Section 25 of the GST Act. Under the GST law, various categories of persons such as related persons, distinct persons have been identified as the relation between the supplier and recipient may influence the consideration. In such cases specific rules have been provided. Rule 28 of the GST Rules, has been specified to determine the value of transaction between related persons. As per second proviso to Rule 28, if the recipient is eligible for full input tax credit, the invoice value will be deemed to be open market value. Applicant has informed this authority that they intent to issue invoice inter alia declaring value of supply liable to GST and they further informed that the recipient is eligible to claim full input tax credit. There is no breach by the applicant by changing the method of determination of value of supply by application of Rule 28 instead Rule 30 of the GST Rules. Thus, the applicant can apply Rule 28 of the GST Rules, 2017 to determine the value of supply of goods for supply of goods by one distinct entity (factory/depot) as defined u/s25(4) of the CGST Act to another entity having same PAN (factory/depot).
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