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TMI BlogVALUATION OF SUPPLY OF GOODS AND SERVICES UNDER GSTX X X X Extracts X X X X X X X X Extracts X X X X ..... t allowed, subject to certain conditions, before or at the time of supply. 13.3 When consideration either wholly or in part is not in money terms, the price of the supply of goods and/or services is influenced by factors like relationship of parties or where certain transactions are deemed to be supply which do not have a price and transaction value declared is not reliable, the value has to be determined in accordance with the Rules prescribed in CGST Rules, 2017, for determination of value of taxable supplies. 13.4 As per Section 15(3) of the CGST Act, 2017, post-supply discounts or incentives are to be included in the transaction value. However, where the post-supply discount is established as per the agreement which is known at or bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the price excluding subsidies provided by the Central and State Government. 13.7 As per Rule 32(5) of the CGST Rules, 2017, where 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 the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored. 13.8 In case of supply of Construction service (Works Contract), involving transfer of property in land or undivided share of land, the value of supply of service and goods portio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 13.11 When a supply does not have money as sole consideration and neither open market value nor consideration involved can be ascertained, then, cost based rule as prescribed in Rule 30 of CGST Rules, 2017 is applied. In such cases, the value shall be one hundred and ten percent of the cost of production or manufacture or cost of acquisition of such goods or cost of provision of such services. 13.12 Rule 31 of CGST Rules, 2017, also known as the residual method of Valuation, prescribes that where the value of supply of goods or services or both cannot be determined under Rule 27 to 30, then, the value of supply shall be determined using reasonable means consistent with the principles and general provisions of Section 15 and relevant CGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pient to his customer not being a related person, where the goods are intended for further supply by the said recipient; (b) where the value of a supply is not determinable under clause (a), the same shall be determined by application of cost based method as prescribed in Rule 30 or residual method as prescribed in Rule 31 in that order. 13.16 A Del-Credere Agent (DCA) is a selling agent who is engaged by a principal to assist in supply of goods or services by contacting potential buyers on behalf of the principal. The factor that differentiates a DCA from other agents is that the DCA guarantees the payment to the supplier. Where the buyer fails to make payment to the principal by the due date, DCA makes the payment to the principal on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the gross amount of currency exchanged for an amount up to one lakh rupees, subject to a minimum amount of two hundred and fifty rupees; (ii) one thousand rupees and half of a per cent, of the gross amount of currency exchanged for an amount exceeding one lakh rupees and up to ten lakh rupees; and (iii) five thousand rupees and one tenth of a per cent, of the gross amount of currency exchanged for an amount exceeding ten lakh rupees, subject to maximum amount of sixty thousand rupees. 13.19 The value of supply of services in relation to booking of tickets for travel by air provided by an air travel agent, shall be an amount calculated at the rate of 5% of the basic fare in the case of domestic bookings, and at the rate of 10% of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for his own interest; and (d) receives only the actual amount incurred to procure such goods or services. 13.23 The expenditure or costs incurred by the supplier as a pure agent of the recipient of supply of services shall be excluded from the value of supply, if all the following conditions are satisfied, namely: - (i) the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorisation by such recipient; (ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and (iii) the supplies procured by the pure agent from the third party as a pure agent of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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