2026-VIL-150-AAR
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SGST Advance Ruling Authority

GST – West Bengal AAR - Valuation of imported services from related foreign entity under reverse charge mechanism, Applicability of deeming provision where full input tax credit available, Distinction between commercial invoice value and self-invoice value – Applicant received IT support services comprising software and IT infrastructure maintenance from related foreign entity on cost-to-cost basis. Applicant discharges tax under RCM by issuing self-invoice under Section 31(3)(f) of CGST Act, 2017 claiming full input tax credit - Whether value mentioned in self-invoice raised by Applicant for discharging reverse charge liability can be deemed as open market value for GST purposes where such value differs from commercial invoice value from related foreign supplier - HELD - Import of services from related foreign person where supplier located outside India and recipient located in India constitutes supply under Section 7(1)(b) of CGST Act and falls within scope of RCM under Notification No. 10/2017 - Valuation of supply between related persons is governed by Rule 28 of CGST Rules, 2017. Second proviso to Rule 28(1) provides that where recipient is eligible for full ITC, the value declared in the invoice shall be deemed to be the open market value of the goods or services. Circular No. 210/4/2024-GST dated 26.06.2024 clarifies that this deeming provision applies equally to import of services from foreign related entities where full input tax credit is available to domestic recipient - The self-invoice issued by recipient under Section 31(3)(f) of CGST Act constitutes the relevant invoice for purposes of applying second proviso to Rule 28(1). The deeming provision operates on the basis of recipient's eligibility for full ITC and operates independently of whether value declared in self-invoice corresponds with commercial amount charged by foreign supplier. Once recipient is eligible for full input tax credit and has declared value in self-invoice, that value is required to be treated as deemed open market value for GST purposes - Value mentioned in self-invoice raised by applicant can be deemed as open market value for payment of GST under RCM, subject to condition that applicant is eligible to avail full amount of Input Tax Credit – Ordered accordingly
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