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

Mehta Appliances supplies a refrigerator to a customer for Rs 40,000. The invoice separately shows Rs 1,500 as a state-law levy that is not GST and is charged by the supplier. Which statement about the value of supply is correct?

The value is Rs 41,500. Section 15(2)(a) adds taxes, duties, cesses and fees levied under laws other than the GST enactments when the supplier charges them separately, so the Rs 1,500 state-law levy joins the Rs 40,000 price.

  1. AThe value is Rs 41,500 because taxes and duties under other laws charged separately are includedCorrect
  2. BThe value is Rs 40,000 because any levy shown separately is excluded
  3. CThe value is Rs 41,500 only if the levy is paid by the supplier before the supply
  4. DThe value is Rs 40,000 because only central laws' duties are included

Explanation

Section 15(2)(a) includes taxes, duties, cesses, fees and charges under any law other than the GST Acts and the Compensation Cess Act, if charged separately by the supplier. The Rs 1,500 levy is under another law and is charged separately, so the value is 40,000 + 1,500 = Rs 41,500. Separate display does not exclude it.

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