Example
40
Robert
Ltd engaged in the manufacturer of machinery and sold the machinery to Dev Ltd.
The sale price of the machine (including IGST @ 18%) is Rs. 731600. Trade
discount Rs. 28000 is given on sale price of Rs. 731600.
The above Sale price includes the following charges
| Particulars | Amount (Rs) | |
| (i) | Warranty charges | 32,000.00 |
| (ii) | primary packing | 9,000.00 |
| (iii) | secandary packing | 5,000.00 |
| (iv) | Design and engineering charges | 25,000.00 |
| (v) | Expenses pertaining to installation and erection of the machine( charged by robust ltd on single bill) | 22,000.00 |
| (vi) | pre delievery inspection charge (charge by robust ltd) | 5,000.00 |
| (vii) | After sale services charge | 10,400.00 |
| (viii) | Cost of transport (charge by the robust Ltd) | 8,500.00 |
Determine the Value of Supply for
the purpose of GST.
Answer
Computation of Value of Supply
| Particulars | Amount (Rs) |
| Price of machinery (includes tax under GST act) | 731,600.00 |
| Less trade discount | 28,000.00 |
| Cum duty value of Supply | 703,600.00 |
| Integrated tax on machinery @18% ( 703600*18/118) | 107,329.00 |
| Value of Supply of Machinery | 596,271.00 |
Noes:-
(i)
Price actually paid
or payable for supply is a transaction value for the purpose of GST and the
transaction value includes all incidental expense i.e. packing charge whether
primary or secondary, Design and engineering charges, cost of transport etc.
form part of Price actually paid or payable.
(ii)
Installation
and erection charge will be included because as per section 8 the above supply
will be treated as principal supply as supply of machinery in composite supply
and all supplies part of that supply included as auxiliary services. If these
are provided separately and separate Bill is raised then not treated as
composite and separate value and tax liability is calculated as normal supply of
services and rate of that services is applicable on it.
(iii)
Section
15 specifies that taxes central tax, state tax, union territory tax and
integrated tax and compensation tax shall not form part of value of supply as
per Rule 35 (Value of supply inclusive of integrated tax, central tax, State
tax, Union territory tax) tax under GST reduced from cum
duty price of goods to find out the value of Supply.