1. GST Valuation - Related or Distinct persons
Vikram S. Nankani (Sr. Adv.)

2. Valuation Section 15 (1) of CGST Act Section 15 (4) CGST
Transaction Value
Parties not related
Price is the Sole Consideration
Section 15 (4) CGST
If valuation cannot be determined as per sub-section (1), then as may be presrcibed
Valuation Rules
Section 20 of IGST Act
Provisions of CGST Act w.r.t. value of supply will be applicable to Inter-State supplies

3. Related Person Explanation to Section 15
(a) persons shall be deemed to be “related persons” if––
(i) such persons are officers or directors of one another’s businesses;
(ii) such persons are legally recognised partners in business;
(iii) such persons are employer and employee;
(iv) any person directly or indirectly owns, controls or holds twenty-five
per cent. or more of the outstanding voting stock or shares of both of them;
(v) one of them directly or indirectly controls the other;
(vi) both of them are directly or indirectly controlled by a third person;
(vii) together they directly or indirectly control a third person; or
(viii) they are members of the same family;

4. Distinct Persons Section 25 (4) Section 25 (5)
A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.
Section 25 (5)
Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act.

5. Valuation Rules Rule 2 – Applicable to Related / Distinct Persons
Open Market Value
If recipient is eligible for full Input Tax Credit, then value declared on Invoice will be deemed as Open Market Value
If Open Market Value not available, the value of like goods
Else, as per Rule 4 or Rule 5, sequentially
Rule 3 : Principal & Agent
Open Market Value or 90% of subsequent sale to unrelated person
Rule 4
Cost plus 10%
Rule 5
Residual Method
Reasonable Means consistent to principles of Section 15

6. Specific Inclusions Specific Inclusions
Any Tax, duties, cess, fees charged by the supplier separately
Any costs incurred by the service recipient which is liable to be reimbursed by the supplier
Incidental expenses, including commission and packing charges, incurred at the time or before delivery of goods / services
Interest or late fee or penalty for delayed payment of consideration
Subsidies Directly linked to the price excluding subsidies given by Central or State Government
Supplier should be in receipt of the subsidy

7. Exclusion
Discount
Given at the time of or before supply and recorded in Invoice
Given after supply, if
such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices
input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply

8. THANK YOU
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although I endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.