Section 15 of GST Act tells us how to find the value of taxable supply. Value of taxable supply means the amount on which GST is charged. It is usually the price that the buyer pays to the seller for the goods or services. But sometimes, the price is not the only factor that decides the value of taxable supply. There are some other things that we have to include or exclude in the value of taxable supply.
Some things that we have to include in the value of taxable supply are:
- Any taxes, duties, fees or charges that are charged by any other law, except GST laws.
- Any amount that the seller has to pay for the supply, but the buyer pays it instead.
- Any expenses that the seller charges to the buyer for things like commission, packing, delivery etc.
- Any interest, late fee or penalty that the buyer pays to the seller for delayed payment.
- Any subsidies that are directly linked to the price, except those given by the central or state governments.
Some things that we have to exclude from the value of taxable supply are:
- Any discount that is given before or at the time of supply and is recorded in the invoice.
- Any discount that is given after the supply and is based on an agreement and linked to relevant invoices. But in this case, the buyer has to reverse the input tax credit that he got for the discount.
If we cannot find the value of taxable supply using these rules, then we have to use some other methods that are prescribed by the government.
This is a simple explanation of Section 15 of GST Act.
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Ravi Kumar Saini is the founder of Taxslim Venture, a leading CA,CS,Advocates firm that provides GST registration and consultation in Gurgaon, Delhi and Noida. We are a team of qualified and experienced CAs and professionals, who are committed to helping you comply with the GST laws and regulations.
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