Explain How Value reputation of product be determined – ICAI – GST Rules Issue 6

By | May 10, 2017
(Last Updated On: May 10, 2017)

Manner to determine Value of Reputation of a Product
Explanation (b) to Rule 8 to draft GST Valuation Rules provide that “supply of goods or services or both of like kind and quality” means any other supply of goods or services or both made under similar circumstances that, in respect of the characteristics, quality, quantity, functional components, materials, and reputation of the goods or services or both first mentioned, is the same as, or closely or substantially resembles, that supply of goods or services or both.

Issue

The definition term “supply of goods or services or both of like kind and quality” considers even reputation to be comparable. There is no uniform formula for measuring the value of reputation which varies from market to market and product to product. These terms are imported from customs valuation rules, which may not suit for GST levy. It may lead to many litigations and issues of frivolous notices.

Suggestion

It is suggested that the Rules be amended to bring interpretative notes to explain how the value reputation of the product is determined.

Source ICAI Suggestions on GST Rules Submitted to Govt of India

Leave a Reply

Your email address will not be published.