Page 10 - Chapter 6_Value of Supply

invoices (invoices pertaining to televisions supplied to Shah Electronics for the quarters of April- June and
July-September) provided Shah Electronics reverses the input tax credit attributable to the discount on the basis
of document issued by BEL.
Ü Computation of value of supply for the quarter – April to June
Particulars Amount (₹)
Price at which the televisions are supplied to Shah Electronics [Note 1] 8,400

Add: Packing expenses [Note 2] 1,200
Less: Discount [Note 3] Nil
Value of taxable supply of one unit of television 9,600
Value of taxable supply of televisions for the quarter April-June [₹ 9,600 x 750] 72,00,000

Ü Computation of value of supply for the quarter – July to September

Particulars Amount (₹)
Price at which the televisions are supplied to Shah Electronics [Note 1] 8,400
Add: Packing expenses [Note 2] 1,200
Less: Discount [Note 4] 840
Value of taxable supply of one unit of television 8,760
Value of taxable supply of televisions for the quarter July-Sep [₹ 8,760 x 1,000] 87,60,000

Notes:-
1) As per section 15(1) of CGST Act, 2017, value of supply is the transaction value (i.e. price actually paid or
payable) where price is sole consideration for supply & supply is made to unrelated person.
2) As per section 15(2)(c) of CGST Act 2017, the value of supply includes incidental expenses like packing
charges.
3) Since Shah Electronics has not reversed the input tax credit attributable to such discount on the basis of document
issued by BEL, the conditions specified in section 15(3)(b) have not been fulfilled. Thus, the post- supply
discount will not be allowed as deduction from the value of supply.
4) Since all the conditions specified in section 15(3)(b) have been fulfilled, the post-supply discount will be allowed
as deduction from the value of supply.
Thus, The input tax credit to be reversed will be ₹ 1,51,200 [1,000 x (8,400 x 10%) x 18%].

Q.9
Aviant Ltd., registered in Noida (Uttar Pradesh), is a supplier of machinery used for making bottle
caps. The supply of machinery is effected as under:
1) The wholesale price of the machinery (excluding all taxes and other expenses) at which it is supplied in the
ordinary course of the business to various customers is ₹ 42,00,000. However, the actual price at which the
machinery is supplied to an individual customer varies within a range of ± 10% depending upon the terms
of contract of supply with the particular customer.
2) Apart from the price of the machinery, Aviant Ltd. charges from the customer the following incidental
expenses:
Ü associated handling and loading charges of ₹ 10,000
Ü installation and commissioning charges of ₹ 1,00,000
3) The machinery can be dismantled and erected at another site, if required. The above charges are
compulsorily levied in case of each supply of machinery.
4) Transportation of machinery to the customer's premises is arranged by Aviant Ltd. through a third-party
service provider [Goods Transport Agency (GTA)]. The customer enters into a separate service contract
with the GTA and pays the freight directly to it.
5) A cash discount of 2% on the price of the machinery is offered at the time of supply, if the customer agrees
to make the payment within 15 days of the receipt of the machinery at his premises. In the event of failure
to make the payment within the stipulated time, the company

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