CA Intermediate · Taxation · Value of Supply
Sharma Traders (Jaipur) supplies goods to an unrelated buyer for a price of ₹2,00,000 (excluding taxes). Separately, the buyer is charged ₹8,000 for packing and ₹12,000 for transportation arranged by the supplier up to the buyer's premises, both billed on the same invoice. Under Section 15 of the CGST Act, 2017, what is the value of supply, before GST?
The value of supply is ₹2,20,000. Packing and transportation charges billed by the supplier to the recipient are incidental expenses and are included in the transaction value, so ₹8,000 and ₹12,000 are added to the price of ₹2,00,000.
- A₹2,00,000
- B₹2,08,000
- C₹2,12,000
- D₹2,20,000Correct
Explanation
Packing and transportation charged by the supplier to the recipient are incidental expenses and form part of the transaction value. Value = 2,00,000 + 8,000 + 12,000 = ₹2,20,000. Option ₹2,08,000 wrongly leaves out transport, and ₹2,00,000 ignores both charges.
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