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

Ananya Traders supplies machinery to Kiran Enterprises for a price of Rs 2,00,000. Ananya separately charges Rs 10,000 as customs-type duty levied under a law other than the GST laws, and shows it as a separate line on the invoice. As per Section 15 of the CGST Act, 2017, the value of supply for GST is:

The value of supply is Rs 2,10,000. Section 15(2)(a) adds to the transaction value any taxes, duties, cesses, fees and charges under laws other than GST laws when the supplier charges them separately, so the Rs 10,000 duty is added to the Rs 2,00,000 price.

  1. ARs 2,00,000, because duties are never part of value
  2. BRs 2,10,000, because taxes and duties under other laws charged separately by the supplier are includedCorrect
  3. CRs 1,90,000, because the duty is deducted from the price
  4. DRs 2,10,000, only if the buyer is a related person

Explanation

Section 15(2)(a) includes taxes, duties, cesses, fees and charges levied under any law other than the GST laws, if charged separately by the supplier. So value = 2,00,000 + 10,000 = Rs 2,10,000. Excluding the duty ignores this inclusion rule. The relationship of the parties is irrelevant to this inclusion.

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