9911796707
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 ..... dit Reg. Madam / Sir, The Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing vide Circular No. 210/4/2024 GST dated 26th June, 2024 has issued a clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit, in order to ensure uniformity in the implementation of the provisions of law across the field formations, which is annexed herewith. In exercise of powers conferred by section 168 of the Tripura State Goods and Services Tax Act, 2017 (Tripura Act No. 9 of 2017) for the purpose of uniformity in the implementation of the Act it is instructed to follow the guidelines issued vide Circular No. 210/4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as import of services by the registered person in India, based on an expansive interpretation of the deeming fiction in S.No. 4 of Schedule I of CGST Act, though no consideration is involved in the said activities and the same are not considered as supplies by the said related person in India. It has been represented that the same treatment, which is being given to domestic related parties/ distinct persons as per clarification provided by Circular No. 199/11/2023-GST dated 17.07.2023, may also be provided in cases where a 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd proviso to Rule 28(1) of CGST Rules, in cases involving supply of goods or services or both between the distinct or related persons 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 said goods or services. 3.4 It may be noted that vide Circular No. 199/11/2023-GST dated 17.07.2023, clarification has been issued regarding taxability of services provided by an office of an organisation in one State to the office of that organisation 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 Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (f) of CGST Act and pay tax on reverse charge basis. 3.7 In view of the above, it is clarified that in cases where the foreign affiliate is providing certain services to the related domestic entity, and where full input tax credit is available to the said related domestic entity, the value of such supply of services declared in the invoice by the said related domestic entity may be deemed as open market value in terms of second proviso to Rule 28(1) of CGST Rules. Further, in cases where full input tax credit is available to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
