supply to related party

[Kaustubh Karandikar]

XYZ is manufacturing and supplying moulds exclusively to related party. What should be the basis for valuation for this transaction?

[Venkataprasad Pasupuleti]

Open market value as per rule 28. If recipient is fully eligible, the declared value in the invoice would be deemed as open market value. Therefore, if the recipient unit is eligible for ITC and not making any exempted supplies using such moulds, the amount whatever declared can be taken as taxable value.

AI Summary

Open market value applies to related-party supplies; invoice value is taxable if recipient is ITC-eligible and for taxable use. Valuation of moulds supplied to a related party follows the open market value principle; if the recipient is fully eligible for input tax credit and does not use the moulds for exempt supplies, the declared invoice value is to be treated as the open market value and may be taken as the taxable value.