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

Sharma Traders, a registered supplier in Pune, sells machinery to Kulkarni Engineering for Rs 2,00,000. Sharma separately charges Rs 6,000 on the invoice as packing charges and Rs 4,000 as commission for arranging the sale. Both amounts are charged to the recipient. Ignoring GST, what is the value of supply?

The value of supply is Rs 2,10,000. Commission and packing charged by the supplier to the recipient are incidental expenses that section 15(2)(c) includes in value, so both Rs 6,000 and Rs 4,000 are added to the Rs 2,00,000 price.

  1. ARs 2,00,000
  2. BRs 2,06,000
  3. CRs 2,04,000
  4. DRs 2,10,000Correct

Explanation

Under section 15(2)(c), incidental expenses, including commission and packing, charged by the supplier to the recipient form part of the value of supply. Value = 2,00,000 + 6,000 + 4,000 = Rs 2,10,000. Including only packing (2,06,000) or only commission (2,04,000) omits one of the named incidental items.

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