Skip to content

CA Final · Indirect Tax Laws · Value of Supply

Shree Textiles Ltd, Surat, sells fabric to Ravi Traders, an unrelated buyer, for Rs 2,00,000. Shree separately charges Rs 6,000 as packing charges and Rs 4,000 as a fee under a State law (not GST) on the fabric. Both are shown in the invoice. What is the value of supply under section 15 of the CGST Act, before GST?

The value is Rs 2,10,000. Packing charges are incidental expenses charged by the supplier and the separately charged fee under a non-GST law is also includible, so both are added to the Rs 2,00,000 price under section 15(2).

  1. ARs 2,00,000
  2. BRs 2,06,000
  3. CRs 2,04,000
  4. DRs 2,10,000Correct

Explanation

Section 15(2)(c) includes incidental expenses such as packing charged by the supplier, so Rs 6,000 is added. Section 15(2)(a) includes fees under other laws if charged separately, so Rs 4,000 is added. Value = 2,00,000 + 6,000 + 4,000 = Rs 2,10,000. Rs 2,06,000 omits the State-law fee, and Rs 2,04,000 omits packing.

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