Page 5 - Ch5_Value of Supply

Answer:
Legal Provision:-

As per section 15(2)(b) of CGST Act, 2017, the value of supply shall include any amount that the supplier is
liable to pay in relation to such supply but
Ø which has been incurred by the recipient of the supply and
Ø not included in the price actually paid or payable for the goods &/or services.

Discussion & Conclusion:-
Ü In given case, XYZ Ltd. sells the plant & machinery on 'as is whereas basis' where the dismantling charges
are directly incurred by buyer without the supplier having any liability of the same.
Ü Thus, dismantling charges shall not be included in transaction value ` 2,00,000 of XYZ Ltd.

Ü Thus, the value of supply shall be ` 200000 in this case & the dismantling charges ` 3,000 shall be
separately treated in the invoice of third party and not in the invoice of supplier.

CCP 05.01.04.00

CCP 05.01.05.00
Furniture Wala is a chain of retail showrooms selling both modern and classic furniture. In order to
build strong customer association, the showroom provides free delivery of the furniture at the
premises of the customers if the distance between the showroom and the customer's premises is upto

20 kms. Where the distance is more than 20 kms, the showroom charges a concessional freight of ` 10
for every additional km.
Ms. Leena Kapoor purchases a double bed, a dressing table and a centre table for ` 2,00,000 from
Furniture Wala. Ms. Leena gets free delivery of the furniture as her residence is located at a distance of
18 km from the showroom. The showroom incurs an expenditure of ` 1000 for delivering the furniture

at Ms. Leena's residence. Determine the value of taxable supply made by Furniture Wala.
Will your answer change if residence of Ms. Leena is 50 km away from showroom?
[Study Mat]

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