Skip to content

CA Intermediate · Taxation · Value of Supply

Sharma Traders (Kanpur, registered) sells goods to Gupta Stores (registered, Kanpur) at a list price of Rs 80,000, and the two are unrelated. The invoice shows a trade discount of Rs 4,000 given at the time of supply and shown on the invoice. Packing charges of Rs 2,000 are separately billed and the sale is intra-State. What is the value of supply under Section 15 of the CGST Act, 2017, before GST?

The value of supply is Rs 78,000. The trade discount of Rs 4,000 shown on the invoice is deducted from the price, while the separately billed packing charges of Rs 2,000 are added, as they form part of the consideration for the supply.

  1. ARs 76,000
  2. BRs 78,000Correct
  3. CRs 82,000
  4. DRs 80,000

Explanation

A discount given before or at the time of supply and recorded on the invoice is excluded from the value. Packing charges incurred by the supplier and charged to the recipient are included. Value = 80,000 - 4,000 + 2,000 = Rs 78,000. Rs 76,000 wrongly omits packing charges.

Did you get it right without looking?

One question tells you little. A timed set on Value of Supply shows your real accuracy, how long you take and where you lose marks.

Practise Value of SupplyFree diagnostic mock

More Value of Supply questions