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X Ltd supplies machinery to Y Ltd (related) at Rs 5 lakh; OMV is Rs 8 lakh; Y can claim full ITC. Value for GST:
ARs 5.5 lakh (110% of 5 lakh)
BRs 8 lakh (OMV)
CRs 5 lakh (invoice — deemed OMV per Rule 28 proviso)
DRs 4.5 lakh
Answer & Solution
Correct answer: C. Rs 5 lakh (invoice — deemed OMV per Rule 28 proviso)
1. Since Y can claim full ITC, the second proviso to Rule 28 applies — the invoice value is DEEMED to be the open market value.
2. Therefore Rs 5 lakh declared in the invoice is the value for GST.
3. If Y were ineligible (e.g. exempt output supplies), Rule 28(a) Rs 8 lakh OMV would apply.
_Source: ICAI BoS CA Final Paper 8, Ch 5 "Value of Supply", §Rule 28 proviso 2_
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