Page 21 - Chapter 6_Value of Supply

13: Rule 32(6): Value of a token, or a voucher, or a coupon, or a stamp

Q.23
Easy Coupons Ltd. sells coupons that are redeemable against specified luxury food products at retail
outlets. Each coupon is sold for value of ₹ 900 but is redeemable for supplies worth ₹ 1000. What is the value
of supply of such coupon under GST law? [Study Mat]
Answer:- Legal Provision:
Ü As per Rule 32(6) of the Valuation rules 2017, the value of a coupon is equal to the money value of the goods
redeemable against it.
Conclusion:
Ü In the given case, though the coupon is sold for ₹ 900 but its redeemable value is ₹ 1,000
Ü Thus, Value of supply of such coupon is ₹ 1,000

14: Rule 33: Value of supply of services in case of pure agent
Q.24
Rolly Polly Manufacturers Ltd., registered in Mumbai (Maharashtra), is a manufacturer of footwear.
It imports a footwear making machine from USA. Rolly Polly Manufacturers Ltd. enters into a contract with
Rudra Logistics, a licensed customs broker with its office at Ahmedabad (Gujarat), to meet all the legal
formalities in getting the said machine cleared from the customs station.
Apart from this, Rolly Polly Manufacturers Ltd. authorises Rudra Logistics to incur, on its behalf, the
expenses in relation to clearance of the imported machine from the customs station and bringing the same to
the warehouse of Rolly Polly Manufacturers Ltd. which shall be reimbursed by Rolly Polly Manufacturers
Ltd. to Rudra Logistics on the actual basis in addition to agency charges.
Rudra Logistics provided following details in the invoice issued by it to Rolly Manufacturers Ltd.:

S.No. Particulars Amount
1. Agency charges 5,00,000
2. Unloading of machine at Kandla port, Gujarat 50,000
3. Charges for transportation of machine from Kandla port, Gujarat to its Rudra Logistics' 25,000
godown in Ahmedabad, Gujarat

4. Charges for transportation of machine from Rudra Logistics' Ahmedabad godown to the 28,000
warehouse of Rolly Polly Export Import House in Mumbai, Maharashtra
5. Prepared and submitted Bill of Entry and paid customs duty 5,00,000

6. Dock dues paid 50,000
7. Port charges paid 50,000
8. Hotel expenses 45,000
9. Travelling expenses 50,000
10. Telephone expenses 2,000

Compute the value of supply made by Rudra Logistics with the help of given information.
Would your answer be different if Rudra Logistics has charged ₹ 13,00,000 as a lump sum consideration for
getting the imported machine cleared from the customs station and bringing the same to the warehouse of
Rolly Polly Manufacturers Ltd.? [Study Mat] [CA Final MTP Mar 19, MTP 1 May 25]
Answer: Legal Provision:(Rule 33, CGST Rules 2017)
Ü A “Pure Agent” is a person who:
1 Has a contract with the recipient to act as a pure agent and incur expenses on their behalf.
2 Does not hold ownership of the goods/services procured as a pure agent.
3 Does not use the goods/services for personal interest.
4 Charges only the actual amount incurred for procurement, in addition to their own service charges.
Ü Expenditure incurred by a Pure Agent is excluded from the taxable value if:
† The payment is made on behalf of the recipient with prior authorization.

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