Determination of Value of Supply

1) An assessee was under impression that his product is exempt from GST and hence sold the goods at Rs.
100 per piece without charging GST. Later, it was found that actually, the product was chargeable with
GST @ 18%. Department claimed that since goods were removed without GST, transaction value
should be Rs. 100 and GST is payable accordingly. Assessee contended that price of Rs. 100 should be
taken as inclusive of GST and actual GST payable should be calculated by back calculations. Determine
the correct GST payable per piece.

2) F&M Clothing sells garments worth Rs. 40,000 to Lara Fashion. Rs. 500 has been incurred as packing
charges of the garments. Further, 1% discount has been given on account of promotion scheme. F&M
Clothing further provides a discount of 0.5% if Lara Fashion makes the payment before the 30 th of the
month using IMPS. Determine the value of supply.

3) Mr. A sold 1,000 unit of goods to Mr. B for Rs. 20,000 and total units sold during the year to Mr. B
including the said 1,000 units are 2,500 unit. As per terms of the agreement if Mr. A is purchases more
than 2,000 unit of goods in a year than Mr. A shall allow 10% discount on the total supplies. Assuming
GST rate @ 18%, how will the discount be recorded?

4) Admission to True Theatre is Rs. 90 per ticket for a Tamil Movie as well as for a Hindi Movie. The
theatre also charges entertainment charge @ 10% on Tamil Movie and 20% on any other language
movie. In the month of November, True Theatre sold 2,000 tickets of Tamil Movie and 1,500 tickets of
Hindi Movie. Find the value of taxable supply of service. If the applicable rate of GST is 18%,
determine the GST liability if any?

5) Mr. Ram sold goods to Mr. Lakshman for Rs. 2,50,000. As per the contract of sale, Mr. Ram is required
to deliver the goods at the premises of Mr. Lakshman. Mr. Ram hires transporter for transportation &
delivery of goods. However, the freight of Rs. 2,500 was paid by Mr. Lakshman to the transporter. Find
the transaction value of supply of goods.

6) Mr. A buys dry fruit of Rs 2,000 and asks for a special packing for which Rs 500 is charged. Determine
the transaction value and calculate the GST if the rate is 12%.

7) Mr. A is a seller of furniture. He supplied the furniture for Rs. 5,75,000 to Mr. B with the condition that
he will remove old furniture from the premises of Mr.B by charging Rs. 5,000. Find the value of taxable
supply of goods in the hands of Mr. A.

8) Mr. Bhanu makes supply of Rs. 2,00,000 to Mr. Renu. The contract provides that Mr. Renu will pay Rs.
50,000 to Mr. Bhanu and Rs. 1,50,000 to Mr. Venu to settle the debt of Mr. Bhanu. Find the transaction
value and GST liability in the hands of Mr. Bhanu if applicable rate of CGST and SGST is 9% each.

9) F&M Clothing sells garments to Lara Fashion amounting to Rs. 40,000 and there is an agreement
between the two parties stating that a credit period of 30 days is permitted for the purpose of making the
payment. Despite this, F&M Clothing requests Lara Fashion to make the payment within 7 days since it
is under financial strain and states that if Lara Fashion complies, it shall be eligible for a further
discount of 2%. Owing to this, Lara Fashion makes the payment within 7 days. Determine the value of
supply and ITC to be reversed by Lara Fashion if any.

10) M/s XYZ Ltd. supplies goods and / or services to Advalue Advisors for Rs. 5,00,000. As per the
standing agreement, a credit period of 30 days is allowed for payment. However, due to a severe cash
crunch, M/s XYZ Ltd request Advalue Advisors to make payment within 2 days, promising a discount
of 5% on doing so. Advalue Advisors makes the payment within 2 days. Determine the value of supply
and ITC to be reversed by Lara Fashion if any.
11) Sriram Textiles is a registered person in Hyderabad. A particular variety of clothing has been
categorized as non-moving stock, costing Rs. 5,00,000. None of the customers were willing to buy these
clothes in spite of giving big discounts on them, for the reason that the design was too experimental.
After months, Sriram Textiles was able to sell this stock on an online website to another retailer located
in Meghalaya for Rs. 2,50,000, on the condition that the retailer would put up a poster of Sriram
Textiles in all their retail outlets in the State. Determine the value of supply.

12) Mr. A sold goods to Mr. B for Rs. 20,000. Mr. A is charging packing charges of Rs. 800. Mr. A is also
paying freight of Rs. 2,800 from Mr. A's premises to Mr. B's premises. Whether packing charges or
freight is required to include in the invoice to determine taxable value? Calculate invoice value if the
applicable rate of GST is 12%.

13) Bharat Gas sells cooking gas cylinders. Selling price per cylinder is Rs. 800. Customers receive subsidy
of Rs. 200 directly from Government in their bank accounts. Hence the net cash outflow for the buyer is
Rs. 600. Determine the value of supply of goods (per cylinder) in the hands of Bharat Gas.

14) The Government provides subsidy, for the benefit of farmers but it is given to the manufacturer of
fertilizers. Will such subsidy form part of value of supply? Give appropriate reasons.

15) Mr. A sold goods worth of Rs. 50,000. Mr. A also charged interest of Rs. 750 for delay in payment. Mr.
A is allowing discount of Rs. 2,000 at the time of supply. Determine the value for levy of GST.

16) A supply priced at Rs. 2,000 is made, with a credit period of 1 month for payment. Thereafter interest of
12% is charged. The payment is received after the lapse of two months from the date of supply.
Calculate value of supply.

17) Mr. X is providing construction services to Mr. Y. In addition to the consideration, Mr. Y is also
supplying construction material to Mr. X. Discuss determination of value of supply to levy GST?

18) M/s Nambiar & Co., an Audit firm based in Cochin undertake an audit assignment of his client based in
Chennai. The Contract mentioned about the audit fees of Rs. 5,00,000 and arrangement of taxi by the
client which may be worth Rs. 15,000. Find the transaction value on which M/s Nambiar and Co., is
liable to pay GST.

19) How will the value be determined in the following transaction? Give reasons with suitable assumptions
where necessary. Selling price of the goods is determined at Rs.9,00,000/- However, following charges
have been recovered separately from the customer

Sr. No. Particulars Amount (Rs.)

(i) Cost of drawings and designs 4,000
(ii) Cost of primary packing 3,000
(iii) Cost of packing at buyer's request for safety during transport 7,000
(iv) Freight and insurance charges paid from factory to buyer's premises 1,11,200

20) Determine the total amount of GST payable from the following, if the rate of GST is 12%:
Sr. No. Particulars Amount (Rs.)
(i) Price of machinery excluding taxes and duties 5, 50,000
(ii) Installation and erection expenses 21,000
(iii) Packing Charges (primary and secondary) 11,500
(iv) Design and engineering charges 2,000
(v) Cost of material supplied by buyer free of charge 8,500
(vi) Pre-delivery inspection charges 500
 Other information:
(a) Cash discount @ 2% on price of machinery was allowed as per terms of contract since full price
of machinery was received before dispatch of machinery.
(b) Bought out accessories supplied along with machinery valued at Rs. 6,000.
Make suitable assumptions as are required and provide brief reasons. Calculations should be supported
by notes wherever, required.

21) ABC Ltd. of Kanpur agreed to sell an electric motor to DEF Ltd. of New Delhi for Rs.15,000 on ex-
factory basis. Other particulars are:
(i) Transportation and transit insurance were arranged by ABC Ltd. at the request of DEF Ltd.
for Rs.1,250 and Rs.1,500 respectively which were charged separately. Actual transportation
charges amounted to Rs.1,000 only.
(ii) A discount of Rs.1,000 was given to DEF Ltd. on the agreed price on payment of an advance of
Rs.3,500 with the order.
(iii) Interest of Rs.800 was charged from DEF Ltd. as it failed to make the payment within 30 days.
(iv) Packing charges of the motor amounted to Rs.1,300.
(v) The expenditure incurred by ABC Ltd. towards „free after sale service‟ during warranty period
comes out to be Rs.500 per motor.
(vi) Dharmada charges of Rs.200 were recovered separately from DEF Ltd.
Compute the value for the purpose of GST.

22) Mr. A sold a bike for Rs. 34,000 with exchange of old bike. Open Market price of the new bike is Rs.
52,000. Old Bike can be sold in the market for Rs. 20,000. Determine the value of supply for the
purpose of levy of GST.

23) Mr. A sold a bike for Rs. 34,000 with exchange of old bike. Open Market price of the new bike is not
available. Old Bike can be sold in the market for Rs. 20,000. Determine the value of supply for the
purpose of levy of GST.

24) Mr. A sold a bike for Rs. 34,000 with exchange of old bike. Open Market price of the new bike as well
as old bike is not available. A bike with the same features of other company is selling in the market for
Rs. 51,000. Determine the value of supply for the purpose of levy of GST.

25) Mr. A sold a bike for Rs. 34,000 with exchange of old bike. Open Market price of the new bike as well
as old bike is not available. Product of same like kind & quality is also not available in the market. Cost
of purchase of the bike is Rs. 47,000. Determine the value of supply for the purpose of levy of GST.

26) Mr. A sold a bike without consideration to Mr. B (a family member). Open Market price of the bike is
Rs. 52,000. Determine the value of supply for the purpose of levy of GST.

27) X Enterprises sold a bike for Rs. 30,000 to Y Enterprises. Both firms are registered under the same
PAN. Open Market price of the bike is Rs. 52,000. Determine the value of supply for the purpose of
levy of GST.

28) X holds 25 per cent (or more) equity share capital in Y Ltd. (a computer manufacturer) as well as Z Ltd.
(a paper manufacturer) and therefore Y Ltd. and Z Ltd. are “related persons”. Y Ltd. supplies a
computer to Z Ltd. for Rs. 78,000. The same computer is offered by Y Ltd. to unrelated customers for
Rs. 85,000. Z Ltd. is not entitled for input credit for this transaction. What is the value of supply?

29) Suppose in the above case, Y Ltd. supplies computer to Z Ltd. as a gift without charging anything. What
will be the value of supply?

30) Mr. A sold a product for Rs. 84,000 to Mr. B (an employee). Open Market price of the product is not
available. A product with the same features of other company is selling in the market for Rs. 1,34,000.
Determine the value of supply for the purpose of levy of GST.
31) A Ltd. sold a product for Rs. 34,000 to Mr. X. Open Market price of the product is not available.
Product of like kind & quality is also not available in the market. Cost of purchase of product is Rs.
50,000. Mr. X holds 30% share in A Ltd. Determine the value of supply for the purpose of levy of GST.

32) A Ltd. sold a product for Rs. 34,000 to Mr. X. Open Market price of the product is not available.
Product of like kind & quality is also not available in the market. Mr. X is selling the same like kind of
product to his consumer for Rs. 60,000. Mr. X holds 30% share in A Ltd. Determine the value of supply
for the purpose of levy of GST.

33) A Ltd. (a software development company) controls 25 per cent (or more) equity share capital in B Ltd.
(a technical consultant). A Ltd. develops an accounting software for B Ltd. for Rs. 2,50,000. A similar
accounting software is developed by A Ltd. for an unrelated customer for Rs. 3,80,000. B Ltd. is
eligible for full input credit for this input supply. What is the value of taxable supply?

34) Black and White Pvt. Ltd. has provided the following particulars relating to goods sold by it to
Colourful Pvt. Ltd.
List price of the goods (exclusive of taxes and discounts) Rs. 50,000
Tax levied by Municipal Authority on the sale of such goods Rs.5,000
CGST and SGST chargeable on the goods Rs. 10,440
Packing charges (not included in price above) Rs. 1,000
Black and White Pvt. Ltd. received Rs. 2000 as a subsidy from a NGO on sale of such goods. The
price of Rs. 50,000 of the goods is after considering such subsidy. Black and White Ltd. offers 2%
discount on the list price of the goods which is recorded in the invoice for the goods. Determine the
value of taxable supply made by Black and White Pvt. Ltd.

35) Contracted value of supply of goods is Rs. 15,00,000 (including GST @ 18%)
The above includes:
Cost of primary packing Rs. 35,000
Cost of protective packing at recipient‟s request for safe transportation Rs. 20,000
Design and engineering charges Rs. 95,000
Apart from above:
Commission paid to agent by recipient in instruction of supplier Rs. 7,000
Freight & insurance charges paid by recipient on behalf of the supplier Rs. 73,000
Compute value of taxable supply with appropriate reasons

36) Value of a machine is Rs. 15,00,000

The above includes:
Taxes (other than GST) charged separately by the supplier Rs. 25,000
Loading charges Rs. 35,000
Consultancy charges for per-installation planning Rs. 5,000
Testing charges Rs. 3,000
Inspection charges Rs. 2,000
Apart from above:
Subsidy received from State Government for setting up factory Rs. 1,00,000
Subsidy received from third party for timely supply of the machine Rs. 70,000
Trade discount actually allowed shown separately in the invoice Rs. 25,000
Compute value of taxable supply with appropriate reasons