CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Value of Supply
Sharma Traders sells goods to Kapoor Enterprises (unrelated) at a list price of Rs 1,00,000. The invoice shows a trade discount of Rs 8,000 duly recorded, and the net price of Rs 92,000 is the sole consideration. Ignoring GST itself, what is the value of supply?
The value of supply is Rs 92,000. The Rs 8,000 discount was given at the time of supply and recorded in the invoice, so it is not included in the value. Tax is therefore computed on the net price of Rs 92,000 rather than the list price.
- ARs 1,00,000
- BRs 92,000Correct
- CRs 1,08,000
- DRs 94,000
Explanation
The discount of Rs 8,000 is recorded in the invoice at the time of supply, so under section 15(3)(a) it is excluded. Value = 1,00,000 - 8,000 = Rs 92,000. Rs 1,00,000 wrongly ignores the discount.
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