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CA Final · Indirect Tax Laws · Value of Supply

Under section 15 of the CGST Act, which of the following is correctly stated about subsidies when computing the value of supply?

Subsidies directly linked to the price are included in the value of supply, but subsidies provided by the Central Government and State Governments are excluded. The amount is included in the value of the supplier who receives the subsidy.

  1. AAll subsidies received by the supplier are excluded
  2. BSubsidies directly linked to price are included, except those given by the Central or State GovernmentsCorrect
  3. COnly subsidies given by the Central Government are included
  4. DSubsidies given by any person are included only if the supply is to a related person

Explanation

Section 15(2)(e) includes subsidies directly linked to the price but excludes subsidies provided by the Central Government and State Governments. A non-government subsidy directly linked to price is therefore included in the supplier's value.

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