Goods and Services Tax (GST) and Corporate Tax Planning · Value of Supply

Inclusions in Value of Supply under Section 15(2) CGST

Updated 11 October 2026 · Fact-checked

Section 15(2) of the CGST Act lists amounts that are added to the transaction value to arrive at the value of supply. They are: other-law taxes and duties charged separately, supplier's liabilities paid by the recipient, incidental expenses, interest, late fee or penalty, and subsidies linked to price (except Government subsidies). Add them, then subtract eligible discounts.

Understand Inclusions in Value of Supply

Under Section 15(1), the starting point is the transaction value: the price actually paid or payable, where the parties are not related and price is the sole consideration. Section 15(2) says that certain other amounts must be added to this price. Without these additions, a supplier could keep the headline price low and recover the rest through separate charges.

The five groups of inclusions are:

Clause (a): taxes, duties, cesses, fees and charges levied under any law other than the CGST, SGST, UTGST and GST (Compensation to States) Acts, if the supplier charges them separately.
Clause (b): any amount the supplier is liable to pay for the supply but which the recipient incurred, and which is not already in the price.
Clause (c): incidental expenses, including commission and packing, charged by the supplier, and any amount charged for anything the supplier did for the supply at or before delivery of goods or supply of services.
Clause (d): interest, late fee or penalty for delayed payment of any consideration.
Clause (e): subsidies directly linked to the price, but not subsidies given by the Central Government or State Governments.

The key test in each clause is whether the amount relates to the supply and is charged by or on behalf of the supplier. For clause (a), the word 'separately' matters. GST itself is not added, because clause (a) excludes levies under the CGST, SGST, UTGST and the Goods and Services Tax (Compensation to States) Act.

For integrated tax, a proviso to section 20 of the IGST Act also includes taxes, duties, cesses, fees and charges under other laws, if charged separately by the supplier. That proviso excludes only levies under the IGST Act itself and the Goods and Services Tax (Compensation to States) Act. Its wording is therefore not identical to Section 15(2)(a).

For subsidies, the Explanation to Section 15(2) says the subsidy is included in the value of supply of the supplier who receives it. So a subsidy paid to the manufacturer increases the manufacturer's value, not the value of a later seller.

Key rules to remember

Transaction value: Value of supply = price actually paid or payable (unrelated parties, price sole consideration); Section 15(1). This is the base to which inclusions are added.
Value after inclusions: Value = transaction value + Section 15(2) inclusions − eligible discounts under Section 15(3); Use the exact heads in clauses (a) to (e). GST charged under the CGST, SGST, UTGST or Compensation Acts is not added.
Other-law taxes (clause a): Include taxes, duties, cesses, fees and charges under other laws, if charged separately by the supplier; Excludes CGST, SGST, UTGST and GST (Compensation to States) Act levies.
Recipient-borne liability (clause b): Include amount supplier is liable to pay, incurred by recipient, not already in price; Avoid double counting if it is already in the price.
Incidental expenses (clause c): Include commission, packing and other charges for acts done at or before delivery or supply; Charged by the supplier to the recipient.
Delayed payment charges (clause d): Include interest, late fee or penalty for delayed payment of any consideration; Time of supply for this addition is when the supplier receives it (Sections 12(6) and 13(6)).
Subsidy (clause e): Include subsidy directly linked to price, except Central or State Government subsidy; Included in the value of the supplier who receives it.

How to solve Inclusions in Value of Supply questions

Use this method for any problem asking you to compute or discuss the value of a supply.

1Write the transaction value under Section 15(1) and check that the parties are unrelated and price is the sole consideration. If not, say Section 15(4) and the valuation rules apply.
2List every other amount in the facts: taxes, duties, expenses, interest, subsidies and discounts.
3Map each amount to clause (a), (b), (c), (d) or (e) of Section 15(2), and name the clause in your answer.
4Check the condition of each clause: 'charged separately', 'not already in the price', 'directly linked to price', 'not from Government'.
5Exclude levies under the CGST, SGST, UTGST and GST (Compensation to States) Acts from clause (a), and exclude Government subsidies.
6Deduct discounts only if Section 15(3) is satisfied.
7Add up, show the working in a table-like list, and state the conclusion in one line.

Quickest way: Clause-tagging method

When to use it: For numerical questions with many items in the facts and little time.

Read the facts once and tag each amount with a clause letter (a to e) or 'X' for not included.
Cross out GST itself and Government subsidies first.
Check that nothing already inside the price is added twice.
Add tagged items to the price, then reduce by valid discounts.
Write the clause letter next to each figure so the examiner can award marks.

Common mistakes in Inclusions in Value of Supply

Adding CGST or SGST under clause (a).
Students read 'taxes and duties' and stop before the exception.
Fix: Remember clause (a) covers only taxes under other laws. The GST Acts and the Compensation Act are excluded.
Including every subsidy.
Clause (e) is remembered as 'subsidy is included'.
Fix: Include only subsidies directly linked to price and not given by the Central or State Governments.
Adding a charge that is already in the price.
Students add expenses listed in the facts without checking the price.
Fix: Under clause (b), add only amounts not already in the price actually paid or payable.
Ignoring interest or late fee for delayed payment.
They are treated as financial items outside the supply.
Fix: Clause (d) includes them in value. Mention that time of supply for them is the date the supplier receives them.
Adding a subsidy to the wrong supplier's value.
The Explanation to Section 15(2) is overlooked.
Fix: Add the subsidy to the value of the supplier who receives it.
Treating a charge for a separate supply as an incidental expense.
Any extra charge looks incidental.
Fix: Clause (c) covers acts done in respect of the supply at or before delivery. Test the link to the supply, and mention Section 8 on composite supply where relevant.

Worked examples

Example 1

Sunrise Appliances Ltd, Pune, sells machinery to Kaveri Traders, Nashik, for ₹5,00,000 (unrelated parties, price sole consideration). It also charges separately ₹20,000 packing, ₹15,000 commission to its agent recovered from the buyer, ₹10,000 state-levied cess under another law, and ₹30,000 interest for delayed payment. Compute the value of supply before GST.

Show the solution

Transaction value under Section 15(1) = ₹5,00,000.
Packing ₹20,000 and commission ₹15,000 are incidental expenses charged by the supplier: clause (c).
State cess ₹10,000 is levied under a law other than the GST Acts and is charged separately: clause (a).
Interest ₹30,000 for delayed payment: clause (d).
Total = 5,00,000 + 20,000 + 15,000 + 10,000 + 30,000 = ₹5,75,000.

Answer: Value of supply is ₹5,75,000. GST is then charged on this value.

Example 2

Greenfield Agro Pvt Ltd sells fertiliser at ₹2,00,000 per lot. Under a Central Government scheme it receives a subsidy of ₹40,000 per lot. It also gets a ₹25,000 subsidy from a private trust, directly linked to the selling price. Another ₹6,000 transport charge was incurred by the buyer on behalf of Greenfield, which was Greenfield's own liability and not in the price. Find the value of supply per lot.

Show the solution

Transaction value = ₹2,00,000.
Central Government subsidy ₹40,000 is excluded under clause (e).
Private trust subsidy ₹25,000 is directly linked to price and not from Government, so it is included under clause (e). It goes into the value of Greenfield, as the supplier who receives the subsidy.
The buyer, as recipient of the supply, incurred the ₹6,000 transport, which was Greenfield's liability as supplier and is not in the price: clause (b), included.
Total = 2,00,000 + 25,000 + 6,000 = ₹2,31,000.

Answer: Value of supply per lot is ₹2,31,000.

Exam tips

Quote the clause letter of Section 15(2) for every item. Marks follow the provision.
Write the exact condition: 'charged separately', 'directly linked to price', 'not by Government'.
In numerical questions, show each addition on a separate line and state items excluded with a reason.
Check whether the parties are related. If they are, Section 15(1) does not apply as it stands and valuation rules apply.
Mention the IGST Act, section 20, when the question concerns inter-State supply.

Practice questions from Value of Supply

Inclusions in Value of Supply in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Inclusions in Value of Supply: frequently asked questions

Is subsidy included in value of supply under GST?

A subsidy is included only if it is directly linked to the price and is not given by the Central or a State Government. A subsidy from a private party can therefore be included. The subsidy is added to the value of the supplier who receives it.

Are interest and late fee included in value of supply?

Yes. Section 15(2)(d) includes interest, late fee or penalty for delayed payment of any consideration. Under Sections 12(6) and 13(6), time of supply for this addition is the date the supplier receives it.

Is GST itself included in the value of supply?

No. Clause (a) excludes taxes under the CGST, SGST, UTGST and GST (Compensation to States) Acts. GST is charged on the value, not included in it.

What are incidental expenses under Section 15(2)(c)?

They include commission and packing charged by the supplier to the recipient. They also include any amount charged for anything the supplier did for the supply at or before delivery of goods or supply of services.