In re Wood India Engineering & Projects Private Limited (GST AAR West Bangal)
Whether the value mentioned in the self-invoice raised by the applicant can be deemed as open market value as per Circular No. 210/4/2024 – GST dated 26.06.2024 for the payment of GST under reverse charge?
SEO Title: Self-Invoice Value Deemed Open Market Value for RCM: West Bengal AAR
Summary:
The West Bengal Authority for Advance Ruling considered whether the value declared by Wood India Engineering & Projects Private Limited in its self-invoice for imported IT support services from related foreign entity Wood Group UK Limited could be treated as the open market value for payment of IGST under reverse charge. The applicant, part of the John Wood Group, receives centrally incurred group IT costs allocated on a cost-to-cost basis and discharges GST under reverse charge by issuing a self-invoice. It submitted that the applicant and the foreign entity are related persons, that Rule 28(1) applies, and that the second proviso to Rule 28(1) deems the invoice value to be the open market value where the recipient is eligible for full input tax credit.
The applicant specifically contended that, because Section 31(3)(f) requires the recipient to issue a self-invoice in a reverse-charge situation, the reference to the “invoice” in the second proviso should apply to that self-invoice, even where its value differs from the commercial debit note issued by the foreign affiliate because different cost-allocation methodologies are used. The Revenue agreed, subject to verification of full input tax credit eligibility. The Authority held that the transaction constitutes an import of services and therefore a supply, is an inter-State supply under the IGST Act and attracts reverse charge under Section 5(3) read with Notification No. 10/2017-Integrated Tax (Rate).
