Page 23 - Chapter 6_Value of Supply

Discussion & Conclusion:
Ü In the given case the value of taxable supply shall be determined by applying the rate of exchange as
notified by the CBIC i.e. ₹63.94 which is as on date of issue of invoice.
Ü Thus, the value of taxable supply shall be = $690.25 * 63.94 = ₹ 44,135

2) Legal Provision:
Ü As per Rule 34 of CGST Rules 2017, The rate of exchange for determination of value of taxable
services shall be the applicable rate of exchanged determined as per the generally accepted
accounting principles (GAAP) for the date of time of supply of such services as per section 13 of the
Act.
Discussion & Conclusion:
Ü In the given case the value of taxable supply shall be determined by applying the rate of exchange
determined as per the GAAP i.e. ₹ 67.84 which is as on date of issue of invoice.
Ü Thus, the value of such supply of service shall be = $ 1050 * 67.84 = ₹ 71,232

16: Rule 34: Rate of exchange of currency, other than Indian rupees, for determination of value.

Q.26
Kaushal Manufacturers Ltd., registered in Delhi, is a manufacturer and supplier of electronic home
appliances. It is paying tax under regular scheme. It supplies the electronic home appliances in the domestic
as well as overseas market. For supplies in other States of India, the company has appointed consignment
agents in each such State , except Gurgaon, Haryana and Noida, Uttar Pradesh, where the goods are
supplied directly from its Delhi warehouse.
In the month of January, consignments of electronic home appliances were sent to Cardinal Electricals Pvt.
Ltd. and Rochester Technos – agents of Kaushal Manufacturers Ltd. in Punjab and Madhya Pradesh
respectively. Cardinal Electricals Pvt. Ltd. and Rochester Technos supplied these electronic home
appliances under their invoices to the stores located in their respective States for ₹40,00,000 and ₹70,00,000
respectively. Open market value of such appliances is not available.
Further, in January, electronic home appliances have been supplied to Ronn Technomart - a
wholesale dealer of electronic home appliances in Noida, Uttar Pradesh for consideration of `₹23,00,000,
from its Delhi warehouse. Kaushal Manufacturers Ltd. owns 75% shares of Ronn Technomart. Open
market value of the electronic home appliances supplied to Ronn Technomart is `₹30,00,000. Further, Ronn
Technomart is not eligible for full input tax credit.
Kaushal Manufacturers Ltd. also provides repair and maintenance services to electronic appliance
manufacturers located in India.
The company has also furnished the following information for the month of January:
Particulars `

Supply of electronic home appliances to wholesale dealers of suchappliances in Delhi 84,00,000
Electronic home appliances supplied to Anchor Electricals Inc., USA under LUT 1,26,00,000
[Consideration received in convertible foreign exchange]

Repair and maintenance services provided to Unitech Ltd., an electronic appliance manufacturer, 8,40,000
located in Delhi
Advance received towards repair and maintenance services to beprovided to Orelec Ltd., an
electronic appliance manufacturer, locatedin Delhi [Repair and maintenance services have been 7,00,000
provided in February andinvoice is issued on 28th February]
Advance received for electronic home appliances to be supplied toNovick Electricals, a wholesale
dealer of such appliances in Gurgaon, Haryana [Invoice for the goods is issued at the time of 8,40,000
delivery of the electronic appliances in March]

V’Smart Academy 6.21 CA Vishal Bhattad 09850850800