Valuation ofGoods

[Guest]

Dear Sir,

We are a mfg co, one of our supplier supplies goods to us. He is a manfacturer of goods say for Wall Putty and supply goods to us as per our requirement under our Brand name.So when he is supplying goods to one of our Depot So whether he has to follow rule 7 of Valuation under section 4 of Transaction value,Please explain,please give us any reference regarding this.thanks and regards.

[Mahir S]

Sir,

In your case, rule 7 of valuation rules shall come into picture in both the cases, that is, for sale of goods either by yourself to your depots or directly by the supplier to your depots.

[Guest]

Dear Naveed Sir, If that Supplier supply goods to us on principal to principal basis he is not related persons nor job worker than also he has to follow rule 7 of valuation under section 4 , please explain , pls give us any reference regarding this, thanks and regards

[Mahir S]

Sir,

If the query relates only for supply of the Branded goods by the supplier to your depots, then rule 7 shall not be attracted on the supplier.

However, the procedure does not seem to be proper and legal.

AI Summary

Transaction value rule 7: applicability to direct supplier deliveries vs branded-supply to purchaser depots clarified. Advisers disagreed on application of Rule 7 of valuation rules under section 4: one view treated Rule 7 as applicable to both sales by the manufacturer to its depots and direct supplier deliveries to those depots; a later clarification stated that direct supply of purchaser-branded goods by the supplier does not attract Rule 7 on the supplier, while noting the procedure may be improper and raise compliance issues.