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zanis 0071   19 September 2021

Supply with related parties?

Why does supply with related persons are considered under gst..and supply with unrelated person is not a supply..reason for this??


 5 Replies

CA Altamush Zafar

CA Altamush Zafar (GST Consultant)     19 September 2021

Both are considered supply. There is a difference in valuation method. You will have to elaborate your question

zanis 0071

zanis 0071   19 September 2021

In case of no consideration...supply with related party are considered as deemed supply..where supply with unrelated person is not considered as supply..what is the reason behind it?
CA Altamush Zafar

CA Altamush Zafar (GST Consultant)     19 September 2021

The reason is simply that in case of related persons both persons can control the value of  transactions for mutual gains. In case of unrelated persons logically no one will sell at zero price.

zanis 0071

zanis 0071   19 September 2021

I don't understood the actual reason.how can the value of transaction be controlled..can you explain with some example?
CA Altamush Zafar

CA Altamush Zafar (GST Consultant)     19 September 2021

A father can transfer goods to his son without value.

But the same person will not ordinarily sell without consideration

So the relation of a person is influencing the price therefore a loss to the government.


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