Valuation of supply under CGST Act,2017 and Rules thereof
By: – Sanjeev Singhal
Goods and Services Tax – GST
Dated:- 31-5-2017<\/p>\n
Value for supply of goods and services is important part of GST. For valuing any goods or services is subject matter of discussion and contentious in nature . Value means price of any goods or service on which tax to be imposed particularly when parties are related or distinct person. This has all been incorporated in Section 15 of the CGST Act,2017. Main basis of valuation is Transaction value which has not been defined in the Act but includes having price , between person not related and the price being sole consideration. In valuation one need to keep in mind the inclusion and exclusion from the price of goods and service on which tax under GST Shall be charged.
\nValue of Taxable Supply
\n * The value of supply of goods or supply of services shall be transaction value that is price actually paid or payable where the supplier and recipient of s<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e time ofsupply provided such discount is recorded in the invoice. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the value goods or services or both can not be determined as per the proceeding rules, the value shall be 110% of the cost of production or manufacture or cost of acquisition or cost of provision. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n behalf of policy holder if such amount has been intimated to policy holder. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n th so procured or supplied as pure agent of supply. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Valuation of supply under CGST Act,2017 and Rules thereofBy: – Sanjeev SinghalGoods and Services Tax – GSTDated:- 31-5-2017 Value for supply of goods and services is important part of GST. For valuing any goods or services is subject matter of discussion and contentious in nature . Value means price of any goods or service on … Continue reading “Valuation of supply under CGST Act,2017 and Rules thereof”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-3529","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/3529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3529"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/3529\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nb] after the supply has been effected if;
\n i] discounts is given as per the agreement entered into at or before the supply and linked to relevant invoices.
\n Ii] Input tax credit is reversed by the recipient of supply on such discount.
\n\tWhere the value can not be determined as per sub section 1, the same shall be determined as may be prescribed.
\nValuation Rules
\n * Value of supply of goods or service where the consideration is not wholly in money
\nValue Shall be
\n * Open market value
\n * If OMV is not available, Total consideration in money.
\n * If above two are not available, value of supply of goods or service or both of like kind and quality.
\nExample
\nWhere a new phone is supplied for ₹ 20000 along with the exchange of an old phone and if the price of the new phone without exchange is ₹ 24000, the open market value of the new phone is ₹ 24000.
\n\tValue of goods or service or both between distin<\/p>\n
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\n\tResidual method for valuation of goods or services or both
\nWhere the value goods or services or both can not be determined as per the Rules 1 to 4, same can be fix by reasonable means consistent with principles and general provision of section 15 and these rules. In case of supply of services , the supplier may opt for this rule.
\n\tDetermination of value in respect of certain supplies
\n * Value of supply in relation to purchase and sale of foreign currency. At the option of supplier may be any hereinafter;
\n a] The value of supply of service in purchase or sale of foreign currency including money changing shall be determined by supplier of service as follows:
\n * When currency used is INR, difference of buying and selling and RBI rate for currency at that time.
\n * If RBI rate are not avai<\/p>\n
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\n * In case of single premium annuity, 10% of single premium
\n * In case of other, 25% of premium charged in the first year and 12.5% of premium in subsequent year.
\n Provide that this rule will not apply where premium paid by policy holder is towards coverage of risk cover in life insurance.
\n\tWhere taxable supply is provided by person dealing in buying and selling of second hand goods and no ITC has been claimed, value in this case shall be the difference of buying and selling of goods.
\n Where the purchase value of goods repossessed from defaulting borrower, who is not registered, Value of goods shall be reduced by 5% per quarter or part of the quarter from the date of purchase to the date of sale by person taking the repossession.
\n\tValue of token or voucher or coupon or stamp which redeemable against supply of goods or services or both shall be equal to money value of goods or service redeemed against suc<\/p>\n
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\n iii] does not use his own interest
\n iv] receive only actual amount incurred to procure such goods or service
\n\tRate of exchange of currency other than Indian rupees
\n The rate of exchange for determination of value of goods or service or both shall be the reference rate of RBI on the date of time of supply in terms of Section 12 & 13 of Act.
\n\tValue of supply inclusive of integrated tax, central tax , State tax and Union territory tax
\n Tax Amount = value inclusive of tax* tax rate
\n 100+ tax rate
\nFAQ ;
\n * Is reference to GST Valuation rules requires in all cases.
\nAns. No. it is required only in those cases where value can not be determined u\/s 15[1].
\n\tCan the transaction value referred in Section 15[1]be accepted.
\nAns. Yes. It can be accepted after accepting the inclusion in section 15[2]. Further transaction value can be also accepted where the transaction is between related person and price is not influenced.
\n\tWhether pos<\/p>\n
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