Value to be adopted in respect of transfer to branches located outside the state
Valuation of supply— The applicant has preferred an application seeking advance ruling on the following questions:
1. The value to be adopted in respect of transfer to branches located outside the state.
2. whether the value of such supplies can be determined in terms of the second provision to Rule 28 in respect of supplies made to distinct units in accordance with clause (4) & (5) of Section 25 of the CGST rules, 2017?
Held that—In the case at hand, the applicant and the distinct persons outside the state of Tamil Nadu are different legal persons hence, both are said to be related as per the explanation to Section 15. Therefore the value to be adopted is governed by rules prescribed as per Section 15(4) of CGST Act. Rule 28 of CGST Rules, 2017 provides the value to be adopted when the supply is between distinct persons and the same is as under—
a. Open Market Value as is presently being adopted by them;
b. 90% of the ultimate sale value as raised by the distinct persons to the un-related ultimate customers based on the Purchase Orders in cases of 'as such' supplies;
c. The distinct persons being eligible for full Input Tax credit of Taxes paid by the applicant, the 'Invoice value' is the deemed 'Open Market