Valuation of sale made between related persons

[Rajesh Kumar]

Dear Experts,

As per GST provisions, if ITC is available to recipients , any transaction value is considerable even between related persons.

Please enlight, is there any GST evasion if firm A ( Husband proprietor) issued invoices to firm B ( wife proprietor) when firm B feels lack of ITC or vice versa? Both the firms are registered at same address.

Is transactions between A& B are dubious in nature?

AI Summary

Valuation of Sales Between Related Persons Under GST: ITC Permissible If Transactions Are Genuine, Invoices Require Actual Supply A query was raised regarding the valuation of sales between related persons under GST provisions, specifically when ITC is available to recipients. The concern involved transactions between two firms owned by a husband and wife, both registered at the same address. Responses highlighted that if the transactions are genuine, ITC is permissible under certain conditions. However, the legitimacy depends on the nature of the transactions. Additionally, invoices should only be issued when there is an actual supply of goods or services, referencing a decision by the Orissa High Court for further guidance.