Page 163 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : BHARAT HEAVY ELECTRICALS LTD. 489
Rule 30 of the Rules. Value of supply of goods or services or both based
on cost. - Where the value of a supply of goods or services or both is not de-
terminable by any of the preceding rules of this Chapter, the value shall be
one hundred and ten per cent of the cost of production or manufacture or
the cost of acquisition of such goods or the cost of provision of such ser-
vices.
Rule 31 of the Rules. Residual method for determination of value of sup-
ply of goods or services or both. - Where the value of supply of goods or
services or both cannot be determined under rules 27 to 30, the same shall
be determined using reasonable means consistent with the principles and
the general provisions of section 15 and the provisions of this Chapter :
Provided that in the case of supply of services, the supplier may opt for this
rule, ignoring rule 30
Rule 34 of the Rules : Rate of exchange of currency, other than Indian ru-
pees, for determination of value. -
(1) The rate of exchange for determination of value of taxable
goods shall be the applicable rate of exchange as notified by
the Board under section 14 of the Customs Act, 1962 for the
date of time of supply of such goods in terms of section 12 of
the Act.
(2) The rate of exchange for determination of value of taxable ser-
vices shall be the applicable rate of exchange determined as
per the generally accepted accounting principles for the date
of time of supply of such services in terms of section 13 of the
Act.
7. On perusal of legal provisions (supra), we observe that “Transaction
Value” is the basis for valuation for supply of goods and/or services under the
GST Regime. For the levy of tax, first we have to determine the transaction value.
‘Transaction Value’ is the price actually paid or payable for supply of goods
and/or services. We also observe that Section 15 of the Act provides the provi-
sions for determining the value of goods and services. It provides the mechanism
to know how to calculate the value of goods or services when supply of goods
and services is made between unrelated persons and when the price is the sole
consideration of the supply. We further observe that the provisions of the value
of supply under CGST Act have also been made applicable to IGST Act vide Sec-
tion 20 of the IGST Act, 2017. We also observe that when it is not possible to cal-
culate value of supply as per Section 15 of the Act, the value of taxable supply is
to be calculated as per the relevant Rules of Chapter IV of CGST Rules, 2017
which deals with the determination of value of supply, Since the issue in hand is
related to valuation of goods supplied within India and billing is being done in
foreign currency, thus Rule 34 of the Rules is to be applied here. Now the ques-
tion arises which rate of exchange (import or export) shall be applicable as noti-
fied by the Board under Section 14 of the Customs Act, 1962, to determine the
value of goods.
8. We find that in exercise of the powers conferred by Section 14 of the
Customs Act, 1962, the Government of India issued notification time to time to
determine the rate of exchange of conversion of the foreign currencies relating to
imported and export goods, In this context, we have peruse the letter dated
23-12-2019 of the applicant wherein they intimated the authority that normally
the foreign currency price in the contract is to cover imported content of the ma-
terial used in setting up of Power Station in India wherein Indian company usu-
ally imported goods, make foreign currency payment to their supplier, in turn
GST LAW TIMES  23rd April 2020  283