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𝗚𝗦𝗧 𝗩𝗮𝗹𝘂𝗲 𝗼𝗳 𝗦𝘂𝗽𝗽𝗹𝘆:

𝗝𝗲𝘁𝗵𝗮𝗹𝗮𝗹 𝗚𝗶𝘃𝗲𝘀 𝗕𝗵𝗶𝗱𝗲 𝗮 ₹𝟭𝟬,𝟬𝟬𝟬 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁 – 𝗕𝘂𝘁 𝗚𝗦𝗧 𝗠𝗮𝘆 𝗦𝘁𝗶𝗹𝗹 𝗔𝗽𝗽𝗹𝘆 𝗼𝗻 ₹𝟱𝟬,𝟬𝟬𝟬!

𝗖𝗮𝗻 𝗼𝗳𝗳𝗲𝗿𝗶𝗻𝗴 𝗮 𝘀𝗽𝗲𝗰𝗶𝗮𝗹 𝗱𝗶𝘀𝗰𝗼𝘂𝗻𝘁 𝘁𝗼 𝗮 𝗿𝗲𝗹𝗮𝘁𝗶𝘃𝗲 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝘆𝗼𝘂𝗿 𝗚𝗦𝗧 𝗹𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆?

Jethalal, owner of 𝗚𝗮𝗱𝗮 𝗘𝗹𝗲𝗰𝘁𝗿𝗼𝗻𝗶𝗰𝘀, operates an electronics showroom in Chennai.

Atmaram Bhide, his close friend from Gokuldham Society, visits the showroom to purchase a television.

𝗧𝗵𝗲 𝘁𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻:

𝗠𝗮𝗿𝗸𝗲𝘁 𝗽𝗿𝗶𝗰𝗲 𝗼𝗳 𝘁𝗲𝗹𝗲𝘃𝗶𝘀𝗶𝗼𝗻: ₹50,000

𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝗽𝗿𝗶𝗰𝗲 𝗼𝗳𝗳𝗲𝗿𝗲𝗱 𝘁𝗼 𝗕𝗵𝗶𝗱𝗲: ₹40,000

𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁: ₹10,000

𝗦𝗵𝗼𝘂𝗹𝗱 𝗝𝗲𝘁𝗵𝗮𝗹𝗮𝗹 𝗰𝗵𝗮𝗿𝗴𝗲 𝗚𝗦𝗧 𝗼𝗻 ₹𝟰𝟬,𝟬𝟬𝟬 𝗼𝗿 ₹𝟱𝟬,𝟬𝟬𝟬?

⚖️ 𝗪𝗵𝗮𝘁 𝗗𝗼𝗲𝘀 𝗚𝗦𝗧 𝗟𝗮𝘄 𝗦𝗮𝘆?

Under 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟭𝟱(𝟭) 𝗼𝗳 𝘁𝗵𝗲 𝗖𝗚𝗦𝗧 𝗔𝗰𝘁, 𝟮𝟬𝟭𝟳, GST is generally calculated on the actual transaction value when:

Supplier and buyer are 𝗻𝗼𝘁 𝗿𝗲𝗹𝗮𝘁𝗲𝗱 𝗽𝗲𝗿𝘀𝗼𝗻𝘀.

Price is the 𝘀𝗼𝗹𝗲 𝗰𝗼𝗻𝘀𝗶𝗱𝗲𝗿𝗮𝘁𝗶𝗼𝗻.

𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁: Merely being friends does not make Jethalal and Bhide related persons under GST.

Therefore, assuming the discount is genuine and other valuation conditions are satisfied, 𝗚𝗦𝗧 𝗰𝗮𝗻 𝗯𝗲 𝗰𝗮𝗹𝗰𝘂𝗹𝗮𝘁𝗲𝗱 𝗼𝗻 ₹𝟰𝟬,𝟬𝟬𝟬.

However, suppose Bhide is Jethalal's brother!

Under 𝗥𝘂𝗹𝗲 𝟮𝟴 𝗼𝗳 𝘁𝗵𝗲 𝗖𝗚𝗦𝗧 𝗥𝘂𝗹𝗲𝘀, valuation between related persons generally follows open market value, subject to prescribed exceptions.

𝗚𝗦𝗧 𝗺𝗮𝘆 𝘁𝗵𝗲𝗻 𝗯𝗲 𝗰𝗮𝗹𝗰𝘂𝗹𝗮𝘁𝗲𝗱 𝗼𝗻 ₹𝟱𝟬,𝟬𝟬𝟬, 𝗲𝘃𝗲𝗻 𝘁𝗵𝗼𝘂𝗴𝗵 𝗕𝗵𝗶𝗱𝗲 𝗽𝗮𝘆𝘀 𝗼𝗻𝗹𝘆 ₹𝟰𝟬,𝟬𝟬𝟬!

🏭 𝗪𝗵𝘆 𝗦𝗵𝗼𝘂𝗹𝗱 𝗧𝗮𝗺𝗶𝗹 𝗡𝗮𝗱𝘂 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝗖𝗮𝗿𝗲?

Whether you operate a textile business in Tiruppur, an auto-components company in Chennai or a manufacturing unit in Coimbatore, transactions between 𝗴𝗿𝗼𝘂𝗽 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀, 𝗿𝗲𝗹𝗮𝘁𝗶𝘃𝗲𝘀 𝗮𝗻𝗱 𝗮𝘀𝘀𝗼𝗰𝗶𝗮𝘁𝗲𝗱 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 deserve careful scrutiny.

✅ 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀

✔ Review related-party transactions and pricing.

✔ Document discounts and commercial justifications.

✔ Verify GST valuation before raising invoices.

✔ Check whether full Input Tax Credit eligibility changes the valuation treatment.

📢 𝗙𝗶𝗻𝗮𝗹 𝗧𝗵𝗼𝘂𝗴𝗵𝘁

𝗬𝗼𝘂𝗿 𝘀𝗲𝗹𝗹𝗶𝗻𝗴 𝗽𝗿𝗶𝗰𝗲 𝗮𝗻𝗱 𝗚𝗦𝗧 𝘁𝗮𝘅𝗮𝗯𝗹𝗲 𝘃𝗮𝗹𝘂𝗲 𝗺𝗮𝘆 𝗻𝗼𝘁 𝗮𝗹𝘄𝗮𝘆𝘀 𝗯𝗲 𝘁𝗵𝗲 𝘀𝗮𝗺𝗲!

𝗔𝗿𝗲 𝘆𝗼𝘂𝗿 𝗶𝗻𝘁𝗲𝗿𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝘁𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻𝘀 𝗰𝗼𝗿𝗿𝗲𝗰𝘁𝗹𝘆 𝘃𝗮𝗹𝘂𝗲𝗱 𝘂𝗻𝗱𝗲𝗿 𝗚𝗦𝗧?

Review your pricing policies before a GST audit or notice exposes costly discrepancies.

𝗖𝗔 𝗦𝗮𝗶𝗹𝗲𝘀𝗵 𝗕𝗵𝗮𝗻𝗱𝗮𝗿𝗶

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