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of <h1>Transactions between NDDB and Unions not considered related party supplies under CGST Act</h1> <h3>In Re : M/s. National Dairy Development Board</h3> In Re : M/s. National Dairy Development Board - 2018 (14) G.S.T.L. 483 (A. A. R. - GST), [2018] 2 GSTL (AAR) 84 (AAR) Issues:1. Whether the arrangement between NDDB and Unions constitutes a supply between related persons as per Schedule I of the CGST Act, 2017Rs.2. If the above question is affirmative, whether NDDB is required to determine the value of activities undertaken according to Section 15(5) of the CGST Act, 2017Rs.Analysis:Issue 1:The applicant, NDDB, is a statutory body assisting organizations in the dairy sector as per the NDDB Act. The applicant provides end-to-end services to JMU and WAMUL under agreements with state governments of Jharkhand and Assam without any consideration. The applicant argues that the relationship between NDDB and Unions is not that of related parties as there is no control exercised by NDDB over the Unions. The agreements specify that the Unions are beneficiaries of the services provided by NDDB, and there is no commercial motive involved. The Authority rules that the transactions are not between related parties as per Schedule I of the CGST Act.Issue 2:The Authority examines the provisions of Section 15 of the CGST Act regarding the valuation of taxable supplies. It is observed that the services provided by NDDB to the Unions are actually received by the state governments, with the Unions benefiting indirectly. The agreements with the state governments outline the management and operational responsibilities of NDDB towards the Unions. The Authority concludes that there is no control exercised by NDDB over the Unions, and the transactions do not fall under the definition of related party transactions in GST. Therefore, there is no requirement for NDDB to determine the value of activities undertaken as per Section 15(5) of the CGST Act.In conclusion, the Authority rules that the transactions between NDDB and the Unions, based on agreements with the state governments, do not constitute supplies between related parties as per the CGST Act. Therefore, there is no obligation for NDDB to determine the value of activities undertaken in accordance with Section 15(5) of the CGST Act.
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