This circular provides clarification regarding valuation of import of services by a related person located outside India, where the Indian recipient is eligible for full Input Tax Credit (ITC).

It explains that as per Rule 28(1) of the CGST Rules, when goods or services are supplied between related or distinct persons and the recipient is eligible for full ITC, the value declared in the invoice shall be deemed as the open market value. Extending the principle clarified earlier in Circular No. 199/11/2023-GST (dated 17.07.2023), the same treatment applies to cases of import of services between related persons.

Accordingly, where a foreign affiliate provides services to its related domestic entity and full ITC is available, the value declared in the self-invoice issued by the Indian recipient under Section 31(3)(f) of the CGST Act shall be treated as open market value. If no invoice is issued in such cases, the value of services may be deemed as ‘Nil’, also considered as open market value under Rule 28(1).

This clarification ensures consistency and avoids unwarranted tax demands where full ITC is admissible to the recipient.