Value of taxable supply of goods and services
- Transaction value, i.e. the price actually paid or payable, is the basis for valuation when:
Supplier and recipient are not related
Price is the sole consideration
- Any taxes, duties, fees and charges levied under any statute other than the GST Acts are included in value, if charged separately on the invoice.
- Amount paid by recipient on behalf of the supplier is includible in value.
- Incidental expenses incurred before supply (eg. commission, packing, weighment, loading, inspection, testing, etc) is includible in value.
- Interest, late fee or penalty for delayed payment is includible in value.
- Subsidies directly linked to the price excluding subsidies provided by the Governments are includible in value ( NOTE: a general subsidy which is not specifically connected to sale of any specific goods will not be includible.)
- Discount given before or at the time of supply, duly recorded on the invoice is not includible in value.
- However, discount given after supply is not includible in value only if there exists an agreement to such effect at the time of supply related to specific invoices and if the ITC to that extent is reversed.
- ITC to be reversed if payment is not made to the supplier within 180 days.
Value of supply of goods made or received through an agent shall be:
- Open market value
- Or at the option of the supplier, 90% 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
Transaction value cannot be the basis of valuation when:
- The consideration is not money, wholly or partly
- The supplier and recipient are related
In such cases the following rules apply:
a. The open market value of such supply
b. If open market value is not available, consideration in money + equivalent consideration not in money
c. If a and b are not possible, value of goods or services of like kind and quality
d. If a, b and c are not possible, consideration + equivalent amount not in money by applying the following rules 30 or 31 of the Act in that order
Rule 30 – Value of supply of goods or services based on cost
Where value is not determinable by any preceding methods, the value shall be 110% of the cost of production, or manufacture or cost of acquisition of such goods or provision of such services.
Rule 31 – Residual rule
Where the value of supply of goods or services or both cannot be determined under the previous rules, the same shall be determined using reasonable means consistent with the principles and the general provisions of section 15 of the CGST Act dealing with value of supply 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.