Value of supply of goods or services or both between distinct or related persons, other than through an agent
Rule 28 of the CGST Rules
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Value between distinct or related persons: open market value, then the value of like supplies, then Rule 30 or 31 – but where the recipient can take full input tax credit, whatever the invoice states is accepted as the open market value. The second proviso covers corporate guarantees given to a related person at one per cent of the amount guaranteed or the actual consideration, whichever is higher.
The exact words of the law
1,773 characters, uneditedReproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.
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(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. 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 2 [located in India], 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 2 [per annum], or the actual consideration, whichever is higher.] 2 [Provided that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the value of said supply of services.]
What changed, and when
The amendment trail, newest first — because the version that applies to your case depends on the period.
2023-10-26 · Inserted
52/2021-CTdated
Inserted vide Notification No. 52/2021 – CT dated 26.10.2023.
2023-10-26 · Inserted
12/2024-CTdated
Inserted vide Notification No. 12/2024 – CT dated 10.07.2024 w.e.f. 26.10.2023.
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Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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