Section 15 of CGST Act 2017
(1) The value of a supply of goods and/or services shall be the transaction value, that is the price actually paid or payable for the said supply of goods and/or services where the
(A)Supplier and the recipient of the supply are not related and
(B) The price is the sole consideration for the supply
2) The value of supply shall include:
(a) any taxes, duties, cesses, fees and charges levied under any statute, other than GST
(b) amount supplier is liable to pay but which has been incurred by the recipient.
(c) incidental expenses, such as, commission and packing, charged by the supplier
(d) interest or late fee or penalty for delayed payment (GST GROSS UP CONCEPT )
(e) subsidies directly linked to the price excluding subsidies provided by the Govt
(3) The value of the supply shall not include any discount.
(4) Where the value of the supply of goods or services cannot be determined under sub-section (1), the same shall be determined in such manner as may be prescribed.
Rule 27: Determination of Value of Supply if Price is not the Sole Consideration
27. Where the consideration is not wholly in money: the value of the supply shall,-
(a) be the open market value of such supply;
(b) if the open market value is not available under clause (1) the sum of consideration in money (2) Money equivalent to consideration not in money.
(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; ( Defined in the Rules)
(d) if the value is not determinable under clause (a) or clause (b) or clause (c), apply rule 30 or rule 31 in that order.
Open market value of a supply of goods or services or both means the full value in money, excluding (Tax) GST payable by a person in a transaction, where the supplier and the recipient of the supply are not related and the price is the sole consideration, to obtain such supply at the same time when the supply being valued is made;
Rule 28: Determination of Value of Supply In case Parties Are Related / Distinct Person
Where distinct or related persons are involved
The Value of supply shall be.
(a) Value as available in Open Market.
(b) Value of Supply of goods or services or both of LIKE KIND AND QUALITY
(c) Apply rule 30- Cost Method or Apply rule 31- Residual Method
Proviso :
• If goods are intended for further supply as such by the recipient, value shall, at the option of supplier be equivalent to 90% of price charged for LIKE KIND AND QUALITY by the recipient to his customer ( they should not be related){case of distinct persons}
• Where recipient is eligible for ITC, value declared in invoice shall be deemed to be open market value.
*Distinct Person, shall be:-
• A person, who has obtained or is required to obtain more than one registration in one state/UT or more, shall be considered as distinct persons.
• Where a person who has obtained registration in a State/UT in respect of an establishment, has an establishment in another State/UT, then such establishments shall be treated as establishments of distinct persons
Rule 30: Cost Method : Rule 31: Residual Method
30. Where the value of a supply of goods or services or both is not determinable by any of the preceding rules, the value shall be 110% of the cost of production.
31. As per the residual method, where the value of supply cannot be determined under the cost method, the same shall be determined using reasonable means consistent with the principles and general provisions of the Goods and Services Tax law.
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