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Supply to related person, Goods and Services Tax - GST

Issue Id: - 117415
Dated: 10-8-2021
By:- Kaustubh Karandikar
Supply to related person

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‘Son’ is a director of XYZ Pvt.Ltd. and ‘Father’ is a director of PQR Pvt. Ltd. If 1) XYZ is supplying goods exclusively to PQR, what should be the valuation method being related persons? 2) XYZ is partly supplying goods to PQR and partly to unrelated buyers in that case what should be the valuation method in case of supply to PQR?

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Showing Replies 1 to 2 of 2 Records

1 Dated: 12-8-2021
By:- Shilpi Jain

They would jot be related persons if there is no element of control which exists between the 2 entities.

In case u conclude related and the re intent eligible for credit then any value mentioned in invoice will be omv. Else open market value should be adopted.

2 Dated: 20-8-2021
By:- kapil mahani

The Valuation cannot be challenge till the time the recipient of the goods/services are eligible for the credit. In case, the same is not eligible, then the valuation rules of Open Market value has to be adopted.

Having said the above, it is suggested that valuation shall be reasonable, it should not happen that INR 1 is being adopted on the ground that recipient is eligible for the credit and that shall be deemed market value.

The opinion expressed are personal view and should not be adopted before any authority/law/company for the business practise untill the same is validated with the facts.


Kapil Mahani


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