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CS Executive · Tax Laws and Practice · Time, Value and Place of Supply

Under the CGST Act, 2017, the value of a supply is the transaction value. Which of the following conditions must be satisfied for the transaction value to be accepted as the value of supply?

Transaction value is accepted as the value of supply only where the supplier and recipient are not related persons and the price is the sole consideration for the supply. If either condition fails, the value must be determined in the manner prescribed by the rules.

  1. AThe supplier and recipient are not related and the price is the sole consideration for the supplyCorrect
  2. BThe supplier and recipient are related but the price is market-aligned
  3. CThe price is paid in cash within thirty days of the invoice
  4. DThe supply is made to a registered person only

Explanation

Section 15(1) accepts the price actually paid or payable as value only when the supplier and recipient are not related and the price is the sole consideration. Cash payment, registration of the recipient or a market-aligned price between related persons are not the statutory conditions. If the conditions fail, value is determined as prescribed under section 15(4).

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