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Rules
Rule 28 of CGST Rules i.e. Valuation of Goods and Services Between Distinct or Related Persons (i.e. Valuation between related persons or Associated Enterprises)
May 4, 2020
Rule 28 of CGST Rules
Value of supply of goods or services or both between distinct or related persons, other than through an agent
The value of the supply of goods or services or both
between distinct persons as specified in sub-section (4) and (5) of section 25
or where the supplier and recipient are related,
other than where the supply is made through an agent, shall-
(a) be the open market value of such supply;
For the purposes of the provisions of this Chapter, the expressions- (a) open market value of a supply of goods or services or both means the full value in money, excluding the integrated tax, central tax, State tax, Union territory tax and the cess payable by a person in a transaction, where the supplier and the recipient of the supply are not related and the price is the sole consideration, to obtain such supply at the same time when the supply being valued is made; |
(b) if the open market value is not available,
be the value of supply of goods or services of
like kind and quality;
(b) supply of goods or services or both of like kind and quality
means any other supply of goods or services or both made under similar circumstances that, in respect of the characteristics, quality, quantity, functional components, materials, and the reputation of the goods or services or both first mentioned, is the same as, or closely or substantially resembles, that supply of goods or services or both.
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(c) if the value is not determinable under clause (a) or (b),
be the value as determined by the application of rule 30 or rule 31, in that order
Provided that where the goods are intended for further supply
as such by the recipient,
the value shall,
at the option of the supplier,
be an amount equivalent to ninety percent of the price charged for the supply of goods
of like kind and quality
by the recipient to his customer not being a related person.
Provided further that
where the recipient is eligible for full input tax credit,
the value declared in the invoice
shall be deemed to be the open market value of the goods or services.
Thanks
CA Rahul Gupta
