Valuation provisions copied from excise and service tax law
Some concepts of Valuation provisions have been copied from present service tax and excise law. Concepts in these provisions like ‘related person’ and ‘price is sole consideration’ are not in tune with concept of GST at all. Such valuation provisions will increase litigation and are really unworkable in GST regime where transaction value is the basic criteria. Such artificial additions will result in disallowances of legitimate input tax credit, as that tax has been paid by some other person.
Really provision relating to related buyer should be retained only when the related buyer is ultimate consumer and is not eligible for input tax credit.
‘Value’ for GST would include interest or late fee or penalty for delayed payment of any consideration for any supply. This would create havoc.