{"id":5620,"date":"2019-02-18T12:12:24","date_gmt":"2019-02-18T06:42:24","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=5620"},"modified":"2021-05-17T17:26:03","modified_gmt":"2021-05-17T11:56:03","slug":"complete-overview-on-value-of-supply","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/complete-overview-on-value-of-supply\/","title":{"rendered":"Complete Overview on Value of Supply In GST"},"content":{"rendered":"

Value of Supply<\/span><\/h3>\n
\"www.carajput.com;<\/a>
www.carajput.com; Value of Supply<\/figcaption><\/figure>\n

What is the Value of Supply?<\/span><\/strong><\/p>\n

The value of Supply in common terms is nothing but the amount paid by the recipient on supply to the supplier as consideration for a supply.<\/p>\n

Example: A goes to a shop of B and purchases a television. He pays amount of ` 20,000 as consideration for TV Purchased. Let\u2019s decode the transaction between A and B.<\/p>\n

(a) What is the nature of transaction: Supply of Television by B to A<\/p>\n

(b) Who is the supplier: B<\/p>\n

(c) Who is the recipient of supply: A<\/p>\n

(d) What is the Value of Supply: ` 20,000.<\/p>\n

(e) Who pays for the Value of Supply: A pays to B towards.<\/p>\n

(f) Why amount is being paid by A to B for supply: A is paying ` 20000 as consideration to B for supply of Television<\/p>\n

What is the value of supply of goods or services or both in GST<\/a>:<\/span><\/strong><\/p>\n

Valuation rules determine value of goods or services or both on which tax under\u00a0GST\u00a0has to be charged. Valuation rules have been prescribed under\u00a0GST\u00a0for the purpose of determination of fair market value of goods or services or both supplied by the registered person.<\/p>\n

How Valuation of Supply would be made -section 15(4):<\/span><\/strong><\/p>\n

Valuation of\u00a0supply of goods or services\u00a0or both made under section 15(4), would be as follows:<\/p>\n

(a) Rule 27: Value of supply of goods or services where the consideration is not wholly in money.<\/p>\n

(b) Rule 28: Value of supply of goods or services or both between distinct or related persons, other than through an agent.<\/p>\n

(c) Rule 29: Value of supply of goods made or received through an agent.<\/p>\n

(d) Rule 30: Value of supply of goods or services or both based on cost.<\/p>\n

(e) Rule 31: Residual method for determination of value of supply of goods or services or both.<\/p>\n

What is the relevance for ascertaining value of supply:<\/span><\/strong><\/p>\n

Value of supply is the figure upon which tax is levied and collected. What forms part of the value and what does not form part of the value of supply is required to be ascertained for correct levy of tax.<\/p>\n

Past History of Taxation is full of instances wherein there have been in numerous disputes in ascertaining the value upon which tax would be levied and collected. The ongoing fight between the assesse and the tax regime of whether service tax would form part of the value of sales price for the levy of sales tax is an example of why guidelines for valuation are required to be precise and clear about what to include and what not to include.<\/p>\n

Valuation of supply\u00a0when a transaction is not in INR:<\/strong><\/span><\/p>\n

When exports are made\u00a0the invoice may be raised by the taxpayer in Foreign Currency. The IGST (if any) charged in the invoice will be converted using RBI<\/a> Exchange Rate.<\/p>\n

RBI exchange rates are to be used in case of imports too. When reverse charge is applicable on imported supplies the invoice amount has to be converted using the RBI Exchange Rate.<\/p>\n

Transaction value not to include Discount:<\/span><\/strong><\/p>\n

The value of the supply shall not include any discount that is given-<\/p>\n