Case Law Details
In re Specsmakers Opticians Private Limited (GST AAAR Tamil Nadu)
The issue before us relates to determination of value to be adopted in respect of supply to distinct persons of the appellant in the course of business.
appellant, has claimed before the Lower Authority that applying the Second Proviso to Rule 28 of CGST Rules for supplies to distinct persons for further supply, it is sufficient that they pay the tax at the time of supply of goods from the State of Tamilnadu on the value arrived by taking into account the cost price in tax invoice as the recipient is eligible for full credit of tax paid.
The Lower Authority in the ruling in Para 4.5 has observed that
………….. if a taxpayer can skip all the provisions under Rule 28(a) to ( c), in spite of them being specifically mentioned as the value which “shall” be adopted, then in no scenario will any taxpayer ever use Rule 28 (a) to ( c). Both provisos are to be read together and not independently, i.e., the applicant cannot choose whichever proviso is favourable to them. Therefore the applicant shall adopt the “Open market Value” as per Rule 28 (a) as the same is available for the supplies made to the distinct recipient outside the State. Instead of the available open market value, the applicant can also opt to value the same at 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. If the recipient is eligible for full input tax credit, such a value shall be deemed to be the open market value.”
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