Page 11 - Ch5_Value of Supply

(iv) Subsidy received from the State Government on sale of machine under Skill 5,000

Development Programme [Subsidy is directly linked to the price]
(v) Discount of 2% is offered to BP Ltd. on the price mentioned at S. No. (i) above and
recorded in the invoice
Note: Price of the machine is net of the subsidy received.
Determine the value of taxable supply made by M/s Flow Pro to BP Ltd.

[CA Inter MTP Oct 21] [Study Mat]
Answer:
Computation of value of taxable supply made by M/s. Flow Pro to BP Ltd.

Particulars Amount (`) Remark
Price of the machine 25,000 Since subsidy is received from State Government, the same is
not includible in the value of supply as per section 15(2)(e)
of CGST Act
Third party inspection 5,000 Amount that supplier is liable to pay for supply but is incurred
charges by recipient & not included in the price for the goods, is

includible in value of supply as per section 15(2)(b) of CGST
Act
Freight charges for 2,000 Since arranging freight is the liability of supplier, it is a case of

delivery of the machine composite supply and thus, freight charges are added in the
value of principal supply as per section 15(2)(c) of CGST Act
Total 32,000

Less: Discount @ 2% on 500 Discount given before or at the time of supply if duly recorded in
` 25,000 being price invoice is deductible from the value of supply as per section
charged to BP Ltd. 15(3)(a) of CGST Act

Value of taxable supply 31,500

CCP 05.04.16.00
Following are the particulars, relating to one of the machine sold by SQM Ltd. to ACD Ltd. in the month
of February 20XX at list price of ` 9,50,000 (exclusive of taxes and discount). Further, following
additional amounts have been charged from ACD Ltd:-

Sr.No. Particulars Amount in ₹
(i) Municipal taxes chargeable on the machine 45,000

(ii) Outward freight charges (Contract was to deliver machine at ACD Ltd.’s factory 65,000
i.e. F.O.R. contract)

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