Valuation under GST: formula sheet

Key formulas

Transaction value (Section 15(1))

Value = price actually paid or payable

Applies only if supplier and recipient are not related and price is the sole consideration.

Value of supply after adjustments

Value = price + Section 15(2) inclusions − eligible Section 15(3) discounts

GST itself is not part of the value. Other-law taxes charged separately are included.

Tax from a tax-inclusive value (Rule 35)

Tax = (value inclusive of tax × tax rate %) ÷ (100 + sum of tax rates %)

Use the sum of CGST + SGST, or the IGST rate, as applicable.

Related persons threshold

Ownership, control or holding of 25% or more of voting stock or shares of both persons

One of several tests of related persons in the Explanation to Section 15.

Pure agent exclusion (Rule 33)

Pure agent disbursements are excluded from value if all three conditions are met

Payment on authorisation as pure agent; separately shown in invoice; in addition to own supplies.

Section 15(1): transaction value

Value = price actually paid or payable

Applies only if supplier and recipient are not related and price is the sole consideration.

Rule 27: consideration not wholly in money (ladder)

(a) OMV; (b) money consideration + money equivalent of non-money consideration, if known at time of supply; (c) like kind and quality; (d) money + non-money equivalent by Rule 30 or Rule 31, in that order

Move down only when the earlier clause cannot be applied.

Rule 28(1): related or distinct persons (ladder)

(a) OMV; (b) value of like kind and quality; (c) Rule 30 or Rule 31, in that order

Applies to supplies between distinct persons under section 25(4) and (5), or between related persons, not through an agent.

Rule 28 first proviso: goods for further supply

Value = 90% × price charged by the recipient to his unrelated customer for goods of like kind and quality

At the option of the supplier, where goods are intended for further supply as such by the recipient.

Rule 28 second proviso: recipient eligible for full ITC

Value declared in the invoice = deemed OMV

Applies to goods or services where the recipient is eligible for full input tax credit.

Rule 28(2): corporate guarantee

Value = higher of 1% of guarantee amount per annum, or actual consideration

Applies to a related recipient located in India, for a guarantee to a bank or financial institution. If recipient is eligible for full ITC, the invoice value is deemed the value.

Rule 35: tax from a tax-inclusive value

Tax = (Value inclusive of tax × tax rate %) ÷ (100 + sum of tax rates %)

Use the combined rate of CGST + SGST, or the IGST rate.

Section 15(3): discounts

Discount excluded from value if recorded in the invoice, or post-supply discount agreed in advance, linked to invoices, with ITC reversed by the recipient

Check these conditions before deducting any discount.

Rule 27 order (consideration not wholly in money)

(a) Open market value → (b) Money consideration + money equivalent of non-money consideration (if known at time of supply) → (c) Like kind and quality → (d) Rule 30, then Rule 31

Illustration in the rule: a phone sold for ₹20,000 plus an old phone, with a no-exchange price of ₹24,000, has an open market value of ₹24,000.

Rule 28(1) order (distinct or related persons, no agent)

(a) Open market value → (b) Like kind and quality → (c) Rule 30, then Rule 31

Applies to distinct persons under section 25(4) and (5), or to related persons.

Rule 28 first proviso (goods for further supply as such)

Value = 90% × price charged by recipient to unrelated customer for like kind and quality goods

Optional for the supplier, and available alongside the ladder when goods are for further supply as such. It does not apply to MRP unless that is the actual price to the unrelated customer.

Rule 28 second proviso (recipient eligible for full ITC)

Value declared in invoice = deemed open market value

Taxable value is simply the invoice value, which saves a valuation exercise.

Rule 28(2) corporate guarantee

Value = higher of (1% × guarantee amount per annum) and actual consideration

Applies to a related recipient located in India. If the recipient is eligible for full ITC, the invoice value is deemed to be the value.

Rule 29 (principal and agent, goods)

(a) Open market value, or 90% × agent's price to unrelated customer (supplier's option, goods for further supply) → (b) Rule 30, then Rule 31

Illustration: the agent sells at ₹5,000 per quintal, and an independent supplier charges ₹4,550. Value is ₹4,550, or ₹4,500 if the 90% option is used.

Rule 30 (cost method)

Value = cost of production/manufacture, or cost of acquisition, or cost of provision of services, plus 10% profit (110% of cost)

Rule 30 text was not in the extract supplied. Check the exact wording against the rule before relying on it in an answer.

Rule 31 (residual)

Value = reasonable means consistent with section 15 and the Chapter's principles

For services, the supplier may opt for rule 31 and ignore rule 30.

Tax in a tax-inclusive value (rule 35)

Tax = (Value inclusive of tax × tax rate %) ÷ (100 + sum of tax rates %)

Use this to back out tax from a cum-tax price. Open market value excludes IGST, CGST, SGST/UTGST and cess.

Lottery (rule 31A(2))

Value = 100/140 × face value of ticket or the price notified by the Organising State, whichever is higher

The 140 figure applies from 22.09.2025 as substituted. Earlier text had 100/112 and 100/128, now replaced.

Betting, gambling, horse racing (rule 31A(3))

Value = 100% of the face value of the bet or the amount paid into the totalisator

This is the chance to win in betting, gambling or horse racing in a race club.

Casino (rule 31C)

Value = total amount paid or payable by the player for tokens, chips, coins or tickets, or for participating in an event where none is needed

Amounts refunded on return of tokens are not deductible. Winnings replayed without withdrawal are not counted as fresh payment.

Money changing, rule 32(2)(a)

Value = (buying or selling rate − RBI reference rate) × total units of currency

If no RBI reference rate exists, 1% of gross rupees given or received. If neither currency is rupees, 1% of the lesser of the two rupee equivalents at the reference rate.

Money changing, optional slab, rule 32(2)(b)

Up to ₹1,00,000: 1% of gross amount, minimum ₹250. Above ₹1,00,000 up to ₹10,00,000: ₹1,000 + 0.5% of gross amount. Above ₹10,00,000: ₹5,500 + 0.1% of gross amount, maximum ₹60,000

Option under clause (a) is chosen for a financial year and cannot be withdrawn during it.

Air travel agent, rule 32(3)

Value = 5% of basic fare (domestic) or 10% of basic fare (international)

Basic fare is the part of the air fare on which the airline normally pays commission.

Life insurance, rule 32(4)

(a) Gross premium − amount allocated for investment or savings, if intimated to the policy holder at supply. (b) Single premium annuity not under (a): 10% of single premium. (c) Other cases: 25% of premium in the first year and 12.5% in later years

The sub-rule does not apply where the whole premium is only for risk cover.

Used goods, rule 32(5)

Value = selling price − purchase price; if negative, ignore it

Only where no input tax credit was taken on the purchase and goods are sold as such or after minor processing that does not change their nature.

Repossessed goods proviso

Deemed purchase price = borrower's purchase price − 5 percentage points for every quarter or part thereof, from purchase to disposal

Applies to goods repossessed from an unregistered defaulting borrower for recovering a loan or debt.

Vouchers, rule 32(6)

Value = money value of goods or services redeemable against the token, voucher, coupon or stamp

Postage stamps are excluded.

Distinct persons, rule 32(7)

Value of notified services between distinct persons = NIL, where ITC is available

Applies to a class of service providers notified by the Government.

Pure agent, rule 33

Value of supply excludes pure agent costs if: (i) payment made on recipient's authorisation, (ii) separately shown in the invoice, (iii) supplies are additional to own services

Also test the Explanation: agreement as pure agent, no title, no own use, only actual amount recovered.

Deemed value under Rule 31D

Value of supply = Retail sale price − Tax amount

Applies only to the goods listed in the Table of the rule.

Tax amount

Tax amount = (RSP × tax rate in %) ÷ (100 + sum of applicable tax rates)

Applicable tax means IGST, or CGST and SGST/UTGST as the case may be. For intra-State supply, add CGST and SGST rates in the denominator and the numerator's total rate.

Multiple RSPs on a package

RSP used = maximum of the declared RSPs

If RSP is later increased, the altered higher RSP is used.

Area-wise RSP

Each declared RSP applies to goods intended for sale in its own area

Used where different packages carry different RSPs for different areas.

Who may revise

Registered person + TRAN-1 filed electronically within time under rules 117, 118, 119 or 120

Without an in-time original declaration, the rule does not apply.

How many revisions

Revision allowed: once

A second revision is not permitted under rule 120A.

Mode and time of revision

Electronic filing on the common portal within the time in the said rules, or such further period as the Commissioner extends

Revision does not get a fresh window beyond the rule period.

Base time limit under rule 117

90 days from the appointed day; extension by a further period not exceeding 90 days (Commissioner, on Council's recommendation)

Rule 118 uses the period in rule 117 or a further period extended by the Commissioner.

Credit entry

Credit specified in TRAN-1 is credited to the electronic credit ledger in FORM GST PMT-2 (rule 117(3))

The revised declaration corrects the claim; it is not a new entitlement.

Quick revision

• Value of supply is the transaction value: the price paid or payable, when parties are unrelated and price is the sole consideration.
• Section 15(2) adds other-law taxes charged separately, supplier's liabilities borne by the recipient, incidental expenses, interest or late fee, and price-linked subsidies other than Government subsidies.
• Subsidies from the Central or State Governments are not added to the value.
• Discount recorded in the invoice at or before supply is excluded.
• A post-supply discount needs an agreement, a link to invoices, and reversal of ITC by the recipient.
• Section 15(4) sends you to the Rules when value cannot be fixed under Section 15(1).
• Related persons include those holding 25% or more of the voting stock or shares of both.
• Rule 29 sets the value for supplies of goods between principal and agent. It is the open market value, or, at the supplier's option, 90% of the price the agent charges his customer (not a related person) for goods of like kind and quality. The 90% option applies only where the goods are intended for further supply by the agent.
• Pure agent expenses are excluded only if all three Rule 33 conditions are met, including separate indication in the invoice.
• Rule 31D value = retail sale price less tax, for goods such as pan masala and tobacco products.
• Under Rule 31D, if a package shows more than one retail sale price, the maximum applies.
• Rule 120A allows a registered person to revise FORM GST TRAN-1 once, within the time limit in the rules or any extended period.

Common mistakes

• Including GST charged separately in the value of supply. Fix: Section 15(2)(a) covers taxes under other laws. Tax under the CGST, SGST, UTGST and Compensation Acts is excluded.
• Deducting every discount from the price. Fix: A post-supply discount is excluded only if it is agreed at or before supply, linked to invoices, and the recipient has reversed the related ITC.
• Using the invoice price for every related party sale. Fix: Section 15(1) needs unrelated parties and price as sole consideration. For related or distinct persons, go to Rule 28, where OMV comes first.
• Applying like kind and quality before the money-plus-equivalent clause in Rule 27. Fix: Rule 27 order: OMV, then money plus known equivalent, then like kind and quality, then Rule 30 or 31.
• Taking 90% of MRP under rule 28 or 29. Fix: The 90% is applied to the price charged by the recipient to his unrelated customer for like kind and quality goods. Check the question for that price.
• Treating the 90% option as compulsory. Fix: The 90% is at the supplier's option and only where goods are intended for further supply. Open market value is the primary method.
• Applying 5% or 10% to the full air fare Fix: Use only the part of the fare on which the airline normally pays commission.
• Taking a negative margin on used goods as a negative value Fix: If selling price is less than purchase price, the value is ignored, so it is nil.
• Valuing the goods on the invoice or transaction price Fix: For listed goods, Rule 31D applies notwithstanding the rest of the Chapter. The RSP, not the invoice price, drives value.
• Calculating tax as RSP × rate ÷ 100 Fix: Divide by (100 + rate). The RSP is tax-inclusive.

Exam tips

• In MCQs, the trap is usually one item: a Government subsidy, a discount missing a condition, or separately charged GST. Check these first.
• In written answers, quote the clause such as Section 15(2)(c) or 15(3)(b) beside each adjustment.
• Always state the two conditions of transaction value before computing. Examiners give marks for it.
• When parties are related, say that Section 15(1) does not apply and the value is determined as prescribed. Then refer to the valuation rules.
• Show the working line by line so you earn marks even if one item is wrong.
• Write the rule number and clause beside each step. Examiners award marks for the correct rule.
• Read the first line for the relationship. The same numbers give different answers under Rule 27 and Rule 28.
• In MCQs, the illustration in Rule 27 is a favourite: ₹20,000 plus an old phone exchange, with the new phone's OMV of ₹24,000, gives value ₹24,000.