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

Desai Foods sells products to Nair Stores for Rs 1,00,000. Desai also receives a Rs 10,000 subsidy from a private trust, directly linked to the price of this supply. Desai separately receives Rs 15,000 from the State Government as a subsidy linked to the price of the same supply. Considering only these facts, what is the value of Desai's supply?

The value is Rs 1,10,000. Section 15(2)(e) includes price-linked subsidies except those given by the Central or State Governments, so the private trust's Rs 10,000 is added while the State Government's Rs 15,000 is left out.

  1. ARs 1,25,000
  2. BRs 1,10,000Correct
  3. CRs 1,15,000
  4. DRs 1,00,000

Explanation

Under section 15(2)(e), subsidies directly linked to price are included, but subsidies provided by the Central or State Governments are excluded. The private trust's Rs 10,000 is included; the State Government's Rs 15,000 is excluded. Value = 1,00,000 + 10,000 = Rs 1,10,000.

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