Mr A sells goods to Mr B for Rs 20000/-. Open market value of the
goods is Rs 30000/-. Determine the value of supply if :
1. Mr. A and Mr. B are not related persons
2. Mr. A and Mr. B are related
As per section 15 of CGST Act The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply.
Case 1. Both the conditions of section 15 are satisfied i.e. Mr. A and Mr. B are not related and price is the sole consideration.
Therefore the value of supply is Rs 20000/-
Case 2. Since Mr A and Mr B are related then conditions of section 15 are not satisfied and as per Rule 28 Value of supply shall be the open market value i.e. Rs 30000/-.