TaxTMI 
TaxTMI 
2019 (8) TMI 368
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....ter called the Applicant or the Company) is registered under the applicable provisions of the CGST 2017 and TNGST 2017 vide registration number 33AAPCS6371Q1ZH. They have preferred an application seeking Advance Ruling on "The value to be adopted in respect of transfer to branches located outside the State." The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted the copy of Challan evidencing payment of application fees of Rs. 5,000/-each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2. The Applicant has stated that they import as well as locally procure Lenses, Frames, Sun Glasses, Contact Lenses as well as Reading Glasses, Complete spectacles and are engaged in re-selling them. They have their office in Tamil Nadu at Chennai. They also have branches outside the state of Tamil Nadu and the goods imported and re-sold by the applicant are also transferred to their branches located outside the State for subsequent supply to ultimate customers. In the present case as the branches are distinct persons, they are required to discharge the CGST/SGST/IGST as applicable while supplying the goods to their branches outside the ....
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....uling West Bengal in a similar issue in respect of M/S GKB Lens Private Limited. 4. We have gone through the submissions made by the Applicant. The question before us relates to determination of value to be adopted in respect of transfer to branches located outside the State, i.e., to distinct persons of the same PAN. The applicant claims that applying the second proviso to Rule 28 of GST Rules on such supplies, it is sufficient that they pay the tax at the time of supply of goods from the State of Tamil Nadu on the value arrived by taking into account the cost price in the tax invoice while dispatching the supplies to other States. The claim as we observe is that the value need not be as per first proviso to Rule 28, even though such price be available. 4.1 From the submissions, before us, we find that the applicant imports as well as locally procure Lenses, Frames, Glasses, Contact Lenses, etc and is engaged in re-selling them. The applicant has branches outside Tamil Nadu where, the applicant transfers these goods for further selling from these branches. These branches are distinct persons as per GST Law. Section 25 of CGST Act states (4) A person who has obtained or is re....
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....irectly controls the other; vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii) they are members of the same family; (b) the term "person" also includes legal persons; (c) persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be deemed to be related. In the case at hand, the applicant has branches outside the state of Tamil Nadu, hence, both are said to be related as per the explanation to Section 15. The supply is also to distinct person and therefore the value to be adopted is governed by rules prescribed as per Section 15(4) of CGST Act. The same is provided under Rule 28 of CGST Rules, 2017, which is as under: Rule 28. Value of supply of goods or services or both between distinct or related persons, other than through an agent.-The value of the supply of goods or services or both between distinct persons as specified in sub section (4) and (5) of section 25 or where the supplier and recipient are related, other than where the supply is made through an ....
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....i.e. Lenses, Frames, Sun Glasses, Contact Lenses as well as Reading Glasses, Complete spectacles to both recipients in Tamil Nadu and its branches outside Tamil Nadu. As per the applicant, there are supplies being made to such unrelated recipients within Tamil Nadu who are being supplied at the same time of such supply for which price is the sole consideration. Thus, there exists an 'open market value' for such supplies being made to distinct recipients who are branches of the applicant in different states/ Union territories. Thus, there is no necessity to go further down to Rule 28(b) or (c) as they are to be read sequentially and are also applicable only when 'open market value' is not available. Once Rule 28(a) is applicable, Rule 28(b) or (c) cannot be used by the applicant for determining the value of the supply of goods between distinct persons. 4.4 In the case at hand, the applicant states that their recipients in other states further supply such goods to their customers without any further value addition, repackaging, labeling etc. i.e. they are supplied as such. In such a scenario, Rule 28 gives an option to the supplier, i.e. the applicant, to adopt an amount equivalent ....