Skip to content

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

A supplier invoices goods to an unrelated buyer at ₹50,000 and records in the same invoice a discount of ₹3,000. The invoice also charges ₹1,000 as commission to the supplier's own agent, passed to the buyer. Applying Section 15, what is the value of supply?

The value of supply is ₹48,000. The ₹3,000 discount recorded in the invoice is excluded, but the ₹1,000 commission charged by the supplier to the recipient is an incidental expense that must be included, giving 50,000 minus 3,000 plus 1,000.

  1. A₹47,000
  2. B₹48,000Correct
  3. C₹50,000
  4. D₹51,000

Explanation

The recorded invoice discount of ₹3,000 is excluded under Section 15(3)(a). Commission charged by the supplier to the recipient is an incidental expense included under Section 15(2)(c). Taking the ₹50,000 as the price before commission: 50,000 - 3,000 + 1,000 = ₹48,000. Ignoring commission gives ₹47,000.

Did you get it right without looking?

One question tells you little. A timed set on Value of Supply shows your real accuracy, how long you take and where you lose marks.

Practise Value of SupplyFree diagnostic mock

More Value of Supply questions