Valuation of Supply under GST In India

Valuation of Supply under GST in India

Introduction

Valuation of offer primarily revolves around the determination of the worth of offering of products and or services on that tax is to be levied. Valuation of the offer of products or offer of services shall be the dealing price wherever the provider & the recipient isn't connected half. within the current regime, taxes are to be calculated on the worth of products and services. In general, the dealing price is taken as a worth of offers. GST is charged on the worth of the dealing. dealing price is that the worth truly paid (or payable) for the provision of products and Services between unrelated parties. i.e. worth is that the state thought. In the below article more about Valuation Supply GST.

Valuation of supply includes:

1. Any taxes, duties, Cess fees, & any charged levied underneath any act except GST, GST compensation cess is excluded if charged severally by the provider.
2. Any quantity that the provider is susceptible to pay that has been incurred by the recipient & isn't enclosed within the worth.
3. The valuation of providing can embody all incidental expenses in relevance sale like packaging, commission, etc.
4. Subsidies joined to provide, except Government subsidies are enclosed.
5. Interest /Late Fees/ Penalty for delayed payment of thought are enclosed.

Discount under valuation of supply

Discount is going to be treated differentially beneath GST. Discount is going to be given before or at the time of offer are going to be allowed as deductions from the dealing price. Discount is given when offer is going to be allowed as long as sure conditions area unit glad

Example on the valuation of supply

Let us contemplate associate degree example of Hindu deity Ltd, a manufacturer commerce electronic things like Printer, motherboard, keyboard, disk & mouse etc. It sells a printer to a distributor. The MRP of the Printer is Rs.10,000, however, Hindu deity Ltd sells it for Rs 8,000.

In Present scenario, invoice will look like this Particulars Amount(Rs) Printer 8,000 Add: excise @12.5% 1000 Subtotal, 9000 Add: VAT @14.5%(on subtotal) 1305 Total 10,305. The value of Goods and services supplied is the transaction value, i.e. the price/payable, which is 8,000 in the example. Assuming CGST is 2.5% & SGST is 2.5%.

The Invoice will look like this : Particulars Amount(Rs) Printer 8,000 Add: CGST @2.5% 200 Add: SGST @2.5% 200 Total 8,400.

With the help of the above example, it is easy to understand the difference between the valuation of supply currently & under GST. In case you have any query feel free to contact us. you can also check our services for GST Registration and GST Filling.