General Rule of Valuation
If the following two conditions are fulfilled, the value of supply of goods and/or services shall be the transaction value, that is the price actually paid or payable for the said supply:
- supplier and the recipient of the supply are not related; and
- price is the sole consideration for the supply.
Else, the value shall be determined in such manner as may be prescribed.
Inclusions in the value of supply:
Section 15 of the CGST Act provides that the following items shall be added to arrive at the Value of Supply on which GST shall be levied.
- any taxes, duties, cesses, fees and charges levied under any statute, other than the SGST/CGST and the Goods and Services Tax (Compensation to the States for Loss of Revenue) Act, 2016, if charged separately by the supplier to the recipient;
- 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 actually paid or payable for the goods and/or services;
- incidental expenses, such as, commission and packing, charged by the supplier to the recipient of a supply, including any amount charged for anything done by the supplier in respect of the supply of goods and/or services at the time of, or before delivery of the goods or, as the case may be, supply of the services;
- interest or late fee or penalty for delayed payment of any consideration for any supply; and
- subsidies directly linked to the price excluding subsidies provided by the Central and State governments. The amount of subsidy shall be included in the value of supply of the supplier who receives the subsidy.
Discounts shall not be included in the valu in following cases:
Value in case of certain suppliers
In case of certain service providers an alternate mode of valuation is provided in the rules which is discussed as under:
|Money Changer||Services in relation to purchase or sale of foreign currency for an amount upto rupees 100,000||1% of the gross amount of currency exchanged subject to a minimum amount of two hundred and fifty rupees|
|Services in relation to purchase or sale of foreign currency for an amount exceeding Rs. 100,000 but upto rupees 1000,000||Rs. 1000 + 0.5% of the gross amount of currency exchanged|
|Services in relation to purchase or sale of foreign currency for an amount exceeding Rs. 1000,000||Rs. 5000 + 0.1% of the gross amount of currency exchanged subject to maimum Rs 60,000|
|Insurance||First year of Policy||25% of the premium charged from the policy holder|
|Subsequent years||12.5% of the premium charged from the policy holder|
|Air Travel Agent||Domestic Travel||5% of basic fare|
|Foreign Travel||10% of basic fare|
- Valuation in case of dealer of Second hand goodsWhere a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e. used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on purchase of such goods, the value of supply shall be the difference between the selling price and purchase price and where the value of such supply is negative it shall be ignored.
- Valuation of Voucher etcThe value of a token, or a voucher, or a coupon, or a stamp (other than postage stamp) which is redeemable against a supply of goods or services or both shall be equal to the money value of the goods or services or both redeemable against such token, voucher, coupon, or stamp.
- Valuation of Services in case of notified related parties
The value of taxable services provided by notified class of service providers for supplies made between distinct persons as referred to in section 25, other than those where input tax credit is not available under sub-section (5) of section 17, shall be deemed to be NIL.
- Accounts and Records
- Anti Profiteeing Clause
- Classification of Supply
- Composition Levy
- Complaince Manual
- Constitutional Amendment Act
- Demand and Recovery
- Extent of Levy
- Input tax Credit
- Late fees, Penalties and Prosecution under the GST Law
- Levy of GST
- Levy of Tax under Constitution prior to GST
- Payment of Tax under GST
- Place of Supply
- Position of taxing articles post Constitutional Amendment
- Rate of Tax in GST
- Registration under GST
- Returns under GST Law
- Structure of GST Law
- Taxable Supply
- TCS in case of E Commerce operator
- Time of Supply
- Transitional Provisions
- Understanding GST
- Who is a Taxable Person