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CA Intermediate · Taxation · Value of Supply

Sharma Traders of Jaipur sold goods to Verma Enterprises, a registered buyer, at a list price of Rs 80,000 on 10 June. The invoice shows a trade discount of Rs 4,000, given as per an agreement entered into before the supply and shown on the invoice. Packing charges of Rs 2,000 were also billed separately. All amounts exclude GST. What is the value of supply under Section 15 of the CGST Act, 2017?

The value of supply is Rs 78,000. The pre-agreed trade discount shown on the invoice reduces the price to Rs 76,000, and the packing charges billed to the buyer are added back because they are part of the consideration for the supply.

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

Explanation

Discount given before or at the time of supply and recorded on the invoice is excluded from the transaction value. Packing charges incurred by the supplier and billed to the recipient are included. Value = 80,000 - 4,000 + 2,000 = Rs 78,000. Rs 82,000 wrongly ignores the discount; Rs 76,000 wrongly deducts packing charges.

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