SECTION 15 VALUE OF TAXABLE SUPPLY UNDER REVISED GST LAW
By: – Pradeep Jain
Goods and Services Tax – GST
Dated:- 27-12-2016
GST DAILY DOSE OF UPDATION BY CA PRADEEP JAIN
SECTION 15 VALUE OF TAXABLE SUPPLY UNDER REVISED GST LAW:-
There is material departure in the valuation provisions of a taxable supply in the revised GST Law. A comparative analysis of the changes made with respect to present laws is made as follows:-
The valuation of taxable supply has been specified to be transaction value provided that supplier and recipient are not related and price is the sole consideration for supply. Apart from this, certain inclusions and exclusions have also been provided in the transaction value which is discussed in the succeeding paragraphs.
Firstly, we discuss the deletions made in the inclusive list of transaction value. The amortised value of goods/services supplied free of cost or at reduced price for use in connection with supply of goods/services so valued to the e
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interpretation that free supplies are not to be included in transaction value.
Second deletion is regarding royalties and licence fees related to the supply of goods and/or services being valued that the recipient of supply must pay, either directly or indirectly, as a condition of the said supply, to the extent that such royalties and fees are not included in the price actually paid or payable.
Apart from above deletions, a new clause (d) has been inserted in the inclusion list regarding interest or late fee or penalty for delayed payment of any consideration for any supply. This has the effect that interest charged from the receiver which is in the nature of penalty for delayed payment will also be leviable to GST. As per present Excise/Service Tax Laws, there are number of judicial pronouncements holding that interest for delayed payment is not includible in the transaction value. This will definitely lead to enhancement in the transaction value.
Thirdly, Old GST Law provided tha
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es for Loss of Revenue) Act, 2016, if charged separately by the supplier to the recipient. Here, mention of IGST is missing which means that even IGST will be included in transaction value.
Furthermore, as per old GST Law, subsidies provided in any form or manner, linked to the supply were included in transaction value but as per revised GST law, subsidies provided by the Central and State Government are not to be included. This is a very appreciable step because presently, under Central Excise Laws, even subsidies provided by Central and State Governments are included in the transaction value in light of Apex Court decision in the case of Maruti Suzuki 2014 (9) TMI 229 – SUPREME COURT and Super Synotex 2014 (3) TMI 42 – SUPREME COURT.
Lastly, in the earlier Draft GST Law, situations were specified wherein transaction value was not applicable but not the said sub-section has been deleted.
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