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CA Final · Indirect Tax Laws · Value of Supply

Sharma Electricals Pvt. Ltd., Pune, sells a refrigerator to a customer at Rs 30,000 invoice price. The invoice also shows separately a state-level cess-like fee of Rs 500 levied under a non-GST law and charged separately by the supplier, plus Rs 1,000 as packing charges charged to the customer. GST is shown separately on the total. What is the value of supply for GST?

The value of supply is Rs 31,500. Section 15(2) requires inclusion of taxes, duties, cesses and fees under other laws that the supplier charges separately, and incidental expenses like packing charged to the recipient. So Rs 500 and Rs 1,000 are added to the Rs 30,000 price.

  1. ARs 30,000
  2. BRs 31,000
  3. CRs 31,500Correct
  4. DRs 30,500

Explanation

Under section 15(2), taxes, duties, cesses and fees under other laws charged separately by the supplier are included, as are incidental expenses such as packing charged to the recipient. Value = 30,000 + 500 + 1,000 = Rs 31,500. Rs 31,000 wrongly omits the fee, and Rs 30,500 omits packing.

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