FAQs on Value of Supply under GST

(i) Computation of Invoice value of supply including IGST in case of door delivery.

Working Notes:

1. 1. It is a complete supply & principal element in Goods. Therefore the rate of Tax of principal element will be charged on the value.
   2. Surya agencies can claim ITC of GST paid on GTA services (` 1,440 = 12% of 12,000)

(ii) Supply at the Ex-factory price instead of door delivery basis

Note: The above answer is based on the view that part (ii) of the question is an independent case and thus, the information provided in the first paragraph of the question regarding payment of freight and transit insurance by Surya Agencies does not apply to it. Moreover, when the contract is ex-factory, it implies that the freight and insurance will be the buyer’s responsibility and seller will have no role, whatsoever, in delivering the goods to the customer’s premises.

Computation of value of taxable supplies by Vayu Ltd.

Notes:

1. 1. Being incidental expenses charged by the supplier to the recipient of supply, packing charges are includible in the value as per section 15(2)(c) of the CGST Act, 2017.
   2. Taxes, duties, etc. levied under any law for the time being in force other than CGST, SGST/UTGST, IGST are includible in the value as per section 15(2)(a) of CGST Act, 2017. Duty levied by local authority on sale of goods has been assumed to be recovered from Agni Ltd. and not included in the list price of the goods.
   3. Subsidy directly linked to the price received from a non-Government body is includible in the value in terms of section 15(2)(e) of CGST Act, 2017.
   4. Since discount is known at the time of supply, it is deductible from the value in terms of section 15(3)(a) of CGST Act, 2017

Computation of the value of supply and the GST liability of Dushyant for the month of December, 2020

Notes:

1. 1. Maintenance charges paid to the local society, reimbursed by Bharat, such charges ultimately form part of the rent paid by Bharat to Dushyant and thus, will form part of the value.
   2. Interest free refundable security deposit, Such security deposit does not constitute consideration in terms of section 2(31) of the CGST Act, 2017 and thus, is not includible in the value.
   3. Municipal taxes paid by Dushyant, the same is not includible in the value since such taxes are not charged to the recipient.

Computation of value of taxable supply made by Shri Krishna Pvt. Ltd.

Notes:

(A) Includible in the value as per section 15 of the CGST Act, 2017

(B) Being incidental expenses, the same are includible in the value as per section 15 of the CGST Act, 2017

(C) Since subsidy is received from a non-Government body, the same is includible in the value in terms of section 15 of the CGST Act, 2017. It has been assumed that the subsidy is directly linked to the price

(D) Not includible since waived off

(E) Liability of the supplier being discharged by the recipient, is includible in the value in terms of section 15 of the CGST Act, 2017

Computation of value of taxable supply and amount of GST payable

Notes:

(A) Services provided by an educational institution to its students, faculty and staff are exempt.

(B) It is not exempt.

(C) An institution providing education services for obtaining qualification recognized by a foreign country does not qualify as educational institution. Thus, said services are not exempt.

(D) Exempt assuming that rent/declared tariff is less than ` 1,000 per day. It has been assumed that total rent per day is less than ` 1,000 per flat. However, if it is assumed that total rent per day exceeds ` 1,000 per flat, services of renting of flats become taxable and thus, value of taxable supply and GST payable is ` 9,00,000 and ` 1,62,000 respectively.

(E) An institution providing Modular Employable Skill Course qualifies as educational institution. Services provided by an educational institution to its students, faculty and staff are exempt.

(F) It is not exempt.

Computation of taxable value of supply of machinery

Notes: As per section 15 of CGST Act, 2017

(A) Any amount that the supplier is liable to pay in relation to a supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods shall be included in the value of supply.

(B) Any amount charged for anything done by the supplier in respect of the supply of goods at the time of, or before delivery of goods shall be included in the value of supply.

(C) Since discount is given at the time of supply of machinery and recorded in the invoice, the value of the supply shall not include such discount.

(D) Though the additional discount is established before or at the time of supply, it shall not be excluded from the value of supply on the assumption that the same is not linked to the relevant invoice and proportionate ITC has not been reversed by Ghisa Ltd.

Computation of value of taxable supply by AIM for April, 2020

Liability under REVERSE Charge Mechanism

Liability under FORWARD Charge Mechanism

Computation of NET GST LIABILITY to be paid in cash by AIM for April, 2019

Notes:-

(1) Services provided by an educational institution to its students are exempt. Further, educational institution means inter alia an institution providing services by way of education as a part of a curriculum for obtaining a qualification recognised by an Indian law. Therefore, tuition fee received by Punjab University, being an educational institution, is exempt, since it provides qualification recognised by Indian law.

(2) Tuition fee received by Stan University is taxable since Stan University is not an educational institution as qualification provided by it is not recognised by Indian law.

(3) Fee received from students of competitive exam training academy is taxable as Department of AIM is not an educational institution since competitive exam training does not lead to grant of a recognized qualification.

(4) Catering services provided by educational institutions to its students are exempt. It has been assumed that the mess fees has been charged from the students pursuing the qualification recognised by law.

(5) GST is payable under reverse charge in case of renting of immovable property services supplied by a local authority to a registered person.

(6) GST is payable under reverse charge in case of legal services supplied by a firm of advocates to a business entity.

(7) The amount available in the electronic credit ledger may be used for making payment towards output tax. However, tax payable under reverse charge is not an output tax. Therefore, tax payable under reverse charge cannot be set off against the input tax credit and thus, will have to be paid in cash.

(8) Since all the services provided are intra-State, CGST and SGST @ 9% is charged.

Computation of value of taxable supply made by Candy Blue Ltd.

(For the month of October, 2020)

Notes:-

(1) Since subsidy is received from Government, the same is not includible in the value in terms of section 15 of the CGST Act, 2017.

(2) Since subsidy is received from a non-Government body, the same is includible in the value in terms of section 15 of the CGST Act, 2017.

(3) Includible in the value as per section 15 of the CGST Act, 2017

(4) Being incidental expenses, the same are includible in the value as per section 15 of the CGST Act, 2017

(5) Includible in the value as per section 15 of the CGST Act, 2017.

Computation of value of taxable supply and gross GST liability of Ms. Achintya
(For the month of March, 2020)

Notes:-

As per section 15 of CGST Act, 2017

(1) My taxes, duties and cesses levied under any law other than CGST, SGST is includible in the value.

(2) Packing expenses being incidental expenses, are includible in the value.

(3) Since subsidy is received from State Government, the same is not includible in the value. It has been assumed that such subsidies are directly linked to the price of the goods. Further, since the same has not been adjusted in the list price, the same is to be excluded from the list price.

(4) Since discount is known at the time of supply, it is deductible from the value.

Computation of value of taxable supply of M/s. Apna Bank Limited

(for the month of August, 2020)

Notes:-

(1) Since money does not constitute goods, extending housing loan is not a supply.

(2) Interest does not include processing fee on sanction of the loan. Hence, the same is taxable.

(3) Any commission collected over and above interest on loan, advance or deposit are not exempt.

(4) Services by way of extending loans insofar as the consideration is represented by way of interest are exempt from tax. However, interest involved in credit card services is not exempt.

(5) Services by way of extending loans insofar as the consideration is represented by way of interest are exempt from tax.

(6) My charges collected over and above interest on loan, advance or deposit are not exempt.

Computation of Value of Supply

Notes:-

1. 1. Being reimbursed by the tenant, such charges ultimately form part of the rent paid by the tenant to the owner and thus, will form part of the value.
   2. As per Section 2(31) of the CGST Act, 2017:-Being refundable, the advance is in the nature of security deposit which does not constitute consideration and thus, is not includible in the value.
   3. Being an expenditure incurred by the supplier, the same is not includible in the value, assuming that such taxes are not charged to the recipient.

Determination of Taxable Value of Supply