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CMA Intermediate · Direct and Indirect Taxation · Computation of GST Liability

Sharma Traders, a registered supplier, sells goods to Verma Enterprises, an unrelated buyer, for a price of Rs 1,00,000. The invoice separately charges Rs 5,000 as a state-levied cess under a law other than the GST laws, and Rs 18,000 as GST. What is the value of supply for GST?

The value of supply is Rs 1,05,000. A cess levied under a law other than the GST laws is included when charged separately by the supplier, while the GST charged is not part of the value. So the price of Rs 1,00,000 plus Rs 5,000 cess gives the value.

  1. ARs 1,00,000
  2. BRs 1,05,000Correct
  3. CRs 1,18,000
  4. DRs 1,23,000

Explanation

Under section 15(2)(a), taxes, duties, cesses and fees levied under any other law are included if charged separately by the supplier. GST itself is excluded. Value = 1,00,000 + 5,000 = Rs 1,05,000. Rs 1,23,000 wrongly adds the GST as well.

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