Rule 28 of CGST Rules 2017: Value of Supply of Goods/ Services between Distinct/ Related Persons (other than through Agent)

Provisions under Rule 28 of the Central Goods and Services Tax (CGST) Rules, 2017 relating to “Value of supply of Goods or Services or both between Distinct or Related Persons, other than through an Agent”, are as under:

CGST Rule 28: Value of supply of Goods or Services or both between Distinct or Related Persons, other than through an Agent (Chapter-IV: Determination of Value of Supply)

(1) The value of the supply of goods or services or both between distinct persons as specified in sub-section (4) and (5) of section 25 or where the supplier and recipient are related, other than where the supply is made through an agent, shall-

(a) be the open market value of such supply;

(b) if the open market value is not available, be the value of supply of goods or services of like kind and quality;

(c) if the value is not determinable under clause (a) or (b), be the value as determined by the application of rule 30 or rule 31, in that order:

Provided that where the goods are intended for further supply as such by the recipient, the value shall, at the option of the supplier, be an amount equivalent to ninety percent of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person:

Provided further that 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 goods or services. [rule 28 renumbered as sub-rule (1) from 26/10/2023: refer Note 1]

(2) Notwithstanding anything contained in sub-rule (1), the value of supply of services by a supplier to a recipient who is a related person, by way of providing corporate guarantee to any banking company or financial institution on behalf of the said recipient, shall be deemed to be one per cent of the amount of such guarantee offered, or the actual consideration, whichever is higher. [sub-rule (2) inserted from 26/10/2023: refer Note 1]

Amendments History:

1. Rule 28 renumbered as sub-rule (1) and sub-rule (2) inserted from 26/10/2023 vide Notification 52/2023.

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