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

Meera Pvt Ltd sells goods at a list price of Rs 50,000. The invoice records a trade discount of Rs 5,000 given at the time of supply. Meera also charges Rs 2,000 for packing, shown on the same invoice. Ignoring GST, the value of supply under Section 15 is:

The value of supply is Rs 47,000. The Rs 5,000 discount recorded on the invoice at the time of supply is excluded, while Rs 2,000 packing charged by the supplier is an incidental expense that is included: 50,000 minus 5,000 plus 2,000.

  1. ARs 47,000Correct
  2. BRs 52,000
  3. CRs 45,000
  4. DRs 50,000

Explanation

The discount recorded in the invoice at the time of supply is excluded under Section 15(3)(a), and packing charged by the supplier is included under Section 15(2)(c). Value = 50,000 - 5,000 + 2,000 = Rs 47,000. Rs 52,000 wrongly ignores the discount; Rs 45,000 wrongly deducts packing.

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