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CA Final · Indirect Tax Laws · Value of Supply

Veda Appliances Ltd, Pune, sells a washing machine to a customer for Rs 30,000 plus GST, and takes the customer's old machine in exchange. The same model, sold without any exchange, is priced at Rs 36,000 (excluding GST). Under the CGST Rules, what is the value of supply of the new washing machine?

The value is Rs 36,000. Because the consideration is partly money and partly an old machine, the rule on consideration not wholly in money applies. The open market value of the new machine, its price without exchange, is the value of supply.

  1. ARs 30,000, the money actually received
  2. BRs 36,000, being the open market value of the new machineCorrect
  3. CRs 6,000, being the value of the old machine
  4. DRs 33,000, being the average of the two prices

Explanation

Where consideration is not wholly in money, the value is the open market value of the supply. The open market value is the price of the same machine without exchange, Rs 36,000. Rs 30,000 ignores the non-money part of the consideration, so it is wrong.

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