TaxTMI 
TaxTMI 
‘Son’ is a director of XYZ Pvt.Ltd. and ‘Father’ is a director of PQR Pvt. Ltd. If 1) XYZ is supplying goods exclusively to PQR, what should be the valuation method being related persons? 2) XYZ is partly supplying goods to PQR and partly to unrelated buyers in that case what should be the valuation method in case of supply to PQR?
Supply to related person
10 Aug 2021 
2 Replies 
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Related-party supply valuation: invoice value may stand if recipient claims input tax credit, otherwise open market value applies.
Valuation for related-party supplies depends on the existence of control; absent control the parties are not related. If related, the invoice value may be accepted where the recipient is eligible to claim input tax credit, but where the recipient is not eligible the open market value must be used. Valuation must be reasonable and cannot be artificially minimal. (AI Summary)
Valuation for related-party supplies depends on the existence of control; absent control the parties are not related. If related, the invoice value may be accepted where the recipient is eligible to claim input tax credit, but where the recipient is not eligible the open market value must be used. Valuation must be reasonable and cannot be artificially minimal. (AI Summary)