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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Value of Supply

Under Section 15(1) of the CGST Act, 2017, the value of a supply is the transaction value. Which pair of conditions must be satisfied for the price to be accepted as the transaction value?

The price qualifies as transaction value only if the supplier and recipient are not related persons and the price is the sole consideration for the supply. Other features such as location, registration or written agreements are not conditions under Section 15(1).

  1. AThe supplier and recipient are not related, and the price is the sole consideration for the supplyCorrect
  2. BThe supplier is a registered person, and payment is made through banking channels
  3. CThe supplier and recipient are located in the same State, and the price is stated in the invoice
  4. DThe price is fixed by an agreement in writing, and the recipient is a registered person

Explanation

Section 15(1) defines transaction value as the price actually paid or payable where the supplier and recipient are not related and the price is the sole consideration. Registration status, location, banking channel or written agreement are not conditions in this sub-section.

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