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TMI BlogClarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax creditX X X X Extracts X X X X X X X X Extracts X X X X ..... lar. For the uniformity, it has been decided that the said Circular issued by the CBIC is being made applicable, mutatis mutandis, in implementation of the MGST Act, 2017. Copy of the referred CBIC Circular is attached herewith. This Trade Circular is clarificatory in nature. Difficulty if any, in the implementation of this Circular may be brought to the notice of the office of the Commissioner of State Tax, Maharashtra. (ASHEESH SHARMA) Commissioner of State Tax, Maharashtra State, Mumbai. Circular No. 210/4/2024-GST F. No. CBIC- 20001/4/2024-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing **** North Block, New Delhi, Dated the 26th June, 2024 To, The Principal C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 3.1 In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the CGST Act, hereby clarifies the issues as under: 3.2 Rule 28 of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the CGST Rules ) is reproduced as below: Rule 28 . Value of supply of goods or services or both between distinct or related persons, other than through an agent. (1) The value of the supply of goods or services or both between distinct persons as specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in another State, both being distinct persons. It has been clarified in the said circular that as per the second proviso to Rule 28(1) of CGST Rules, in respect of supply of services by Head Office(HO) to Branch Offices(BO) of an organisation, the value of the said supply of services declared in the invoice by HO shall be deemed to be open market value of such services, if the recipient BO is eligible for full input tax credit. It has also been clarified vide the said circular that in cases where full input tax credit is available to the recipient, if HO has not issued a tax invoice to the BO in respect of any particular services being rendered by HO to the said BO, the value of such services may be deemed to be declared as Nil by HO to BO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the recipient, if the invoice is not issued by the related domestic entity with respect to any service provided by the foreign affiliate to it, the value of such services may be deemed to be declared as Nil, and may be deemed as open market value in terms of second proviso to Rule 28(1) of CGST Rules. 4. It is requested that suitable trade notices may be issued to publicize the contents of this Circular. 5. Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow. (Sanjay Mangal) Principal Commissioner (GST) - Circular - Trade Notice - Public Notice - Instructions - Office orders Tax Management India - taxmanagementindia - taxmanagement - taxmanagemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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