The revised draft GST Act,2016 defines “market value ” under Section 2(64) as below
Section 2(64) “marketvalue” shall mean the full amount which a recipient of a supply is required to pay in order to obtain the goods and/or services of like kind and quality at or about the same time and at the same commercial level where the recipient and the supplier are not related;
The concept of Market value in GST can be analysed as below :
a. the full amount which a recipient of a supply is required to pay
b. the value is for obtaining goods and/or services from a supplier
c. the value should be at par like kind and quality of goods and/or services
d. the goods and/or services shall be of same commercial level
e.the value at the same time when such goods and/or service is obtained
f. the market value is applicable where recipient and the supplier are not related.
The concept of market value in GST is at par fair market value as is prevailing in GST in other parts of the world.
It is pertinent to note that the market value is already in use in India in the provisions of income tax,company law for shares etc.
The market value is near to the already existing in transaction vaue in CEA,1944.
Section 4(3) (d)“transaction value” means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the saleor at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.
However, market value as intrdcued in revised draft GST Act,2016 does not contain the expression ” at any other time” as existing in transaction value .
The market value is also can be considered to be more similar to provisions existing for customs valuation .
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