CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Value of Supply
A supplier invoices goods at Rs 1,00,000 to an unrelated buyer, the price being the sole consideration. The invoice separately shows packing charges of Rs 4,000 charged by the supplier and a trade discount of Rs 6,000 duly recorded in the same invoice. Excluding GST, what is the value of supply under Section 15?
The value of supply is Rs 98,000. Packing charged by the supplier is an incidental expense that is added, while a discount recorded in the invoice is excluded: 1,00,000 plus 4,000 less 6,000 equals 98,000.
- ARs 98,000Correct
- BRs 94,000
- CRs 1,04,000
- DRs 1,10,000
Explanation
Assuming Rs 1,00,000 is the price before discount: 1,00,000 + 4,000 packing (incidental expense included under s.15(2)(c)) - 6,000 discount recorded in the invoice (excluded under s.15(3)(a)) = Rs 98,000. Rs 1,04,000 ignores the discount. Rs 94,000 wrongly deducts the discount and also omits packing.
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