Value of supply under GST

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The value of a supply of goods or services or both shall be the transaction
value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply.

Items to be considered in value of supply:

The value of supply shall include–––
1. any taxes, duties, cesses, fees and charges levied under any law other than GST if charged separately by the supplier;

2. any amount that the supplier is liable to pay in relation to such supply but
which has been incurred by the recipient of the supply and not included in the price;

3. incidental expenses, including commission and packing, charged by the
supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services;

4. interest or late fee or penalty for delayed payment of any consideration for
any supply; and
5. subsidies directly linked to the price excluding subsidies provided by the
Central Government and State Governments. The amount of subsidy shall be included in the value of supply of the supplier who receives the subsidy.

Items not to be considered in value of supply:

The value of the supply shall not include any discount which is given––
a) before or at the time of the supply if such discount has been duly recorded in
the invoice issued in respect of such supply; and
b) after the supply has been effected, if—

i. such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and

ii. input tax credit as is attributable to the discount on the basis of
document issued by the supplier has been reversed by the recipient of the supply.

Where the value of the supply of goods or services or both cannot be determined as above, the same shall be determined as follows:

1) Value of supply of goods or services where the consideration is not wholly in money.

a) be the open market value of such supply;

b) if the open market value is not available, be the sum total of
consideration in money and any such further amount in money as is equivalent to the consideration not in money, if such amount is known at the time of supply;
c) if the value of supply is not determinable under clause (a) or clause (b), be the value of supply of goods or services or both of like kind and quality; if the value of supply is not determinable under clause (a) or clause (b), be the value of supply of goods or services or both of like kind and quality;
d) if the value is not determinable under clause (a) or clause (b) or clause (c), be the sum total of consideration in money and such further amount in money that is equivalent to consideration not in money as determined by the application of rule 30 or rule 31 in that order

2) Value of supply of goods or services or both between distinct or related persons, other than through an agent.-

The value of the supply of goods or services or both between
distinct persons as specified in sub-section (4) and (5) of section 25 or where the supplier and recipient are related, other than where the supply is made through an agent, shall-

a) be the open market value of such supply;
b) if the open market value is not available, be the value of supply of goods or
services of like kind and quality;
c) if the value is not determinable under clause (a) or (b), be the value as determined by the application of rule 30 or rule 31, in that order.

Provided that where the goods are intended for further supply as such by the
recipient, the value shall, at the option of the supplier, be an amount equivalent to ninety percent of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person.

Provided further that where the recipient is eligible for full input tax credit, the value
declared in the invoice shall be deemed to be the open market value of the goods or services.

3) Value of supply of goods made or received through an agent

a) The value of supply of goods between the principal and his agent shall-
be the open market value of the goods being supplied, or at the option of the
supplier, be ninety percent. of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person, where the goods are intended for further supply by the said recipient.
b) where the value of a supply is not determinable under clause (a), the same shall be determined by the application of rule 30 or rule 31 in that order.

4) Value of supply of goods or services or both based on cost.-

Where the value of a supply of goods or services or both is not determinable by any of the preceding rules of this Chapter, the value shall be one hundred and ten percent of the cost of production or manufacture or the cost of acquisition of such goods or the cost of provision of such services.

5) Residual method for determination of value of supply of goods or services or both.-

Where the value of supply of goods or services or both cannot be determined under rules 27 to 30, the same shall be determined using reasonable means consistent with the principles and the general provisions of section 15 and the provisions of this Chapter:

Provided that in the case of supply of services, the supplier may opt for this rule,
ignoring rule 30.

6) Value of supply in case of lottery, betting, gambling and horse racing. –

The value of supply of lottery run by State Governments shall be deemed to be
100/112 of the face value of ticket or of the price as notified in the Official Gazette by the organising State, whichever is higher.

The value of supply of lottery authorised by State Governments shall be deemed to be 100/128 of the face value of ticket or of the price as notified in the Official Gazette by the organising State, whichever is higher.

The value of supply of actionable claim in the form of chance to win in betting,
gambling or horse racing in a race club shall be 100% of the face value of the bet or the amount paid into the totalisator.

7) Value of supply of services in case of pure agent

Notwithstanding anything contained in the provisions of this Chapter, the expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied, namely,-

I. the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorisation by such recipient;
II. the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and
III. the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account.

8) Value of supply inclusive of integrated tax, central tax, State tax, Union territory tax.

Where the value of supply is inclusive of integrated tax or, as the case may be, central tax, State tax, Union territory tax, the tax amount shall be determined in the following manner, namely,-

Tax amount = (Value inclusive of taxes X tax rate in % of IGST or, as the case may be, CGST, SGST or UTGST) ÷ (100+ sum of tax rates, as applicable, in %)

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