TaxTMI 
TaxTMI 
Value of supply of goods or services or both between distinct or related persons, other than through an agent [Rule 28 of CGST Rules]
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....) if the open market value is not available, be the value of supply of goods or services of like kind and quality; (c) if the value is not determinable under clause (a) or (b), be the value as determined by the application of rule 30 or rule 31 of CGST Rules, in that order: (i) Value of supply based on cost i.e. cost of supply plus 10% mark-up (ii) Value of supply determined by using reasonable means consistent with principles & general provisions of GST law. (Best Judgement method) Where the goods are intended for further supply as such by the recipient, the value shall, at the option of the supplier, - be an amount equivalent to 90% of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person. Where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of the goods or services. * Open Market Value means the full value in money excluding taxes under GST laws, payable by a person to obtain such supply at the time when supply being valued is made, provided such supply is between unrelated persons....
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....ircular No. 204/16/2023-GST Dated 27.10.2023 ] Taxability of activity of providing personal bank guarantee by Directors to banks for securing credit facilities for the company without any consideration. * The director and the company are to be treated as related persons. [ Explanation of (a) of section 15 ] * Supply of goods or services or both between related persons, when made in the course or furtherance of business, shall be treated as supply even if made without consideration. [ Section 7(1)(c) r/w para 2 of schedule I ] * Accordingly, the activity of providing personal guarantee by the Director to the banks/ financial institutions for securing credit facilities for their companies is to be treated as a supply of service, even when made without consideration. * Determination of value of supply - In terms of Rule 28 of CGST Rules, the taxable value of such supply of service shall be the open market value of such supply. * Accordingly, as per mandate provided by RBI in terms of Para 2.2.9 (C) of RBI's Circular No. RBI/2021-22/121 dated 9th November, 2021, no consideration by way of commission, brokerage fees or any other form, can be pai....
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.... by the Director to the banks/ financial institutions for securing credit facilities for their companies and the same shall be valued in the manner provided in S. No. (1) of the circular no. 204/16/203. * In such case, the taxable value of supply will be determined as per rule 28(2) irrespective of whether of full ITC is available to the recipient of services or not. (a) 1% of such guarantee offered, or (b) the actual consideration, whichever is higher. 2. In cases where a foreign entity is providing service to its related party located in India, in cases where full ITC is available to the said recipient located in India. [Circular No. 210/4/2024-GST dated 26.06.2024 ] * it is clarified that in cases where the foreign affiliate is providing certain services to the related domestic entity, and where full input tax credit is available to the said related domestic entity, the value of such supply of services declared in the invoice by the said related domestic entity may be deemed as open market value in terms of second proviso to Rule 28(1) of&nbs....
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....n cases falling under rule 28(2)? * Whether the valuation in terms of Rule 28(2) of CGST Rules will apply to the export of the service of providing corporate guarantee between related persons? 4. Clarification on the taxability of activities performed by an office of an organisation in one State to the office of that organisation in another State, which are regarded as distinct persons under section 25 of CGST Act, 2017, Whether the HO is mandatorily required to issue invoice to BOs under section 31 of CGST Act for such internally generated services, and/ or whether the cost of all components including salary cost of HO employees involved in providing the said services has to be included in the computation of value of services provided by HO to BOs when full input tax credit is available to the concerned BOs. [ See Circular No. 199/11/2023-GST dated 17.07.2023 ] Case Law IN RE: M/S. KANSAI NEROLAC PAINTS LTD. 2019 (6) TMI 1108 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA The applicant can apply Rule 28 of the GST Rules, 2017 to determine the value of supply of goods for supply of goods by one di....