Transfer Price for GST if Material Transfer within Company

By | May 28, 2018
(Last Updated On: May 28, 2018)

What will be Transfer Price for GST if Material Transferred within Company

Video Tutorial by CA Satbir Singh explaining Transfer Price for GST if Material Transfer within Company

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What are the valuation rules unde GST for material transfer within company from separate GST number. i.e. Company wants to transfer from Uttaranchal to Punjab . What should be transfer price under GST ?

Comment :

If Punjab unit entitled to 100% ITC then You can declare any price in Tax Invoice.

If Punjab unit not eligible to take 100% ITC then Valuation for charging GST has to be as follow

(a) Open Market Value of Goods  [  Rule 28 of CGST Rules 2017 Value of supply of goods or services or both between distinct or related persons, other than through an agent  ]

(b) if Open market of goods not available then value of identical goods or [  Rule 28 of CGST Rules 2017  Value of supply of goods or services or both between distinct or related persons, other than through an agent]

(c) if (a) or (b) not possible then 110% of the cost of production or manufacture or the cost of acquisition of such goods or the cost of provision of such services. [ Rule 30 of CGST Rules – Value of supply of goods or services or both based on cost ]

c) if (a) or (b) and (c) not possible then , Value is determined using reasonable means [ Rule 31 of CGST Rules – Residual method for determination of value of supply of goods or services or both]

Rule 28 of CGST Rules 2017

Value of supply of goods or services or both between distinct or related persons, other than through an agent

28. The value of the supply of goods or services or both between distinct persons as specified in sub-sections (4) and (5) of section 25 or where the supplier and recipient are related, other than where the supply is made through an agent, shall-

(a)be the open market value of such supply;
(b)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, in that order:

Provided that 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 ninety per cent 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:

Provided further that 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.

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