GST - Related Party
Related Party as per provision of GST law
Query 1: Why you need to identify whether you are related person to AU small finance Bank or not?
Solution: As per provision of GST any services between related parties needs to be valued at fair market value of the services. Thus, incase wherein any services is being rendered to you at concessional rate then also taxes would be payable at the fair market value of the services.
Query 2: What is the measure to classify a person as related party?
Solution: Persons shall be deemed to be “related persons” if––
Such persons are officers or directors of one another’s businesses;
Such persons are legally recognized partners in business;
Such persons are employer and employee;
Any person directly or indirectly owns, controls or holds twenty-five per cent or more of the outstanding voting stock or shares of both of them;
One of them directly or indirectly controls the other;
Both of them are directly or indirectly controlled by a third person;
Together they directly or indirectly control a third person; or they are members of the same family;
The term “person” also includes legal persons.
Persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be deemed to be related.
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