CS Executive · Tax Laws and Practice · Time, Value and Place of Supply
Mehta Ltd sells goods at a list price of Rs 2,00,000. A trade discount of Rs 10,000 is duly recorded in the tax invoice issued at the time of supply. Mehta also charges Rs 3,000 as interest for delayed payment received later. What is the value of supply including the interest, ignoring GST?
The value is Rs 1,93,000. The Rs 10,000 discount recorded in the invoice at the time of supply is excluded, giving Rs 1,90,000, and the Rs 3,000 interest for delayed payment is added because it is part of value of supply.
- ARs 1,93,000Correct
- BRs 2,03,000
- CRs 1,90,000
- DRs 2,00,000
Explanation
Under Section 15(3)(a), a discount given at the time of supply and recorded in the invoice is excluded: 2,00,000 - 10,000 = 1,90,000. Section 15(2)(d) includes interest for delayed payment: 1,90,000 + 3,000 = Rs 1,93,000. Rs 2,03,000 ignores the discount, and Rs 1,90,000 ignores the interest.
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