Question

My company sells old machinery and there is a one common director in both company (buyer and the seller), then how will the determined transition value of machinery?

Answer

As per explanation given in Section 15 of CGST Act
(a) persons shall be deemed to be 'related persons' if''
(i) such persons are officers or directors of one another's businesses;
(ii) such persons are legally recognised partners in business;
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Since the two companies have common Director therefore in view of above explanation this is a transaction between related party. Transaction value is determined as per Rule 28 of CGST Act which is as follows:
"The value of the supply of goods or services or both between distinct persons as specified in sub-section (4) and (5) of section 25 or where the supplier and recipient are related, other than where the supply is made through an agent, shall-
(a) be the open market value of such supply;
(b) if the open market value is not available, be the value of supply of goods or services of like kind and quality;
(c) if the value is not determinable under clause (a) or (b), be the value as determined by the application of rule 30 or rule 31, in that order:
Provided that where the goods are intended for further supply as such by the recipient, the value shall, at the option of the supplier, be an amount equivalent to ninety percent of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person:

Provided further that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of the goods or services."  (Reply dt.04/08/2018)