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CA Final · Indirect Tax Laws · Value of Supply

Sundaram Motors Pvt Ltd sells a car to a dealer for Rs 8,00,000 as per the invoice. Separately, it charges Rs 15,000 as packing and forwarding charges and Rs 5,000 as a state-levied road development fee under a non-GST law, both shown separately on the invoice. GST is charged additionally. What is the value of supply under section 15 of the CGST Act?

The value of supply is Rs 8,20,000. Section 15(2) adds to the price both the separately charged fee levied under a non-GST law and the packing charges charged by the supplier, so Rs 8,00,000 plus Rs 15,000 plus Rs 5,000 gives Rs 8,20,000.

  1. ARs 8,00,000
  2. BRs 8,15,000
  3. CRs 8,20,000Correct
  4. DRs 8,05,000

Explanation

Under section 15(2)(a), taxes, duties, cesses, fees and charges levied under any law other than the GST laws are included if charged separately. Under section 15(2)(c), incidental expenses such as packing charged by the supplier are included. Value = 8,00,000 + 15,000 + 5,000 = Rs 8,20,000. Rs 8,15,000 wrongly omits the fee.

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