Related-party transactions treated as fair market value sales when input tax credit is disallowed under purchase-credit rules If a registered dealer transfers goods to a related person and the relationship has influenced the terms, and the related person would be ineligible for input tax credit or would have it reduced under the purchase-credit rules, the transfer is treated as a deemed sale by the registered dealer and the sale price is fixed at fair market value for VAT purposes.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Related-party transactions treated as fair market value sales when input tax credit is disallowed under purchase-credit rules
If a registered dealer transfers goods to a related person and the relationship has influenced the terms, and the related person would be ineligible for input tax credit or would have it reduced under the purchase-credit rules, the transfer is treated as a deemed sale by the registered dealer and the sale price is fixed at fair market value for VAT purposes.
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