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Value of SupplyValue of Supply Presented by –CA Gagan Kedia
CA GAGAN KEDIA | MRG KEDIA & CO | 1
CA Gagan Kedia | [email protected] | 2
PRICE IS THE SOLE CONSIDERATION 2/3
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CONSIDERATION vs. SOLE CONSIDERATION
Example:
Mrs. Jaya purchases a Samsung television set costing Rs. 85,000 from Reliance Digital, in exchange of her existing TV set.After an hour of bargaining, the shop manager agrees toaccept Rs. 78,000 instead of his quote of Rs. 81,000, as hewould still be in a profitable position (the old TV can be sold for Rs.8,000). Mr. Virat is seller of cricket bats. Due to poor marketconditions, he sells 100 pcs of bats costing Rs. 2,50,000 to atrader friend @ Rs. 1,00,000 (This trader friend had oncehelped Virat in his bad financial times)
CA Gagan Kedia | [email protected] | 3
PRICE IS THE SOLE CONSIDERATION 3/3
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CONTRIBUTION TO CONSIDERATION VS.SPONSORSHIP
Example:A Ltd., is organising a GST Conference event where various costsshall be incurred by the organisers such as, transporation ofdelegates, fooding & lodging of the delegates, providing studymaterials, etc. The ticket price per participant was coming to Rs.5000.
A Ltd., took money and engaged UBER astheir Transportation Partner Make-my-Trip as their AccommodationPartner and Dominoes as theFood Partner. Thereafter, the ticket price per participant came downto Rs. 1500.
2. Viz-a-Viz. Car Wash & OLA
CA Gagan Kedia | [email protected] | 4
Mandatory Inclusions - Taxes
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Issue:Whether TCS under Income Tax, collected by cardealers on sale value above 10 Lakhs, should beincluded in value of supply for charging GST ? Circular No. 76/50/2018-GST dated 31st December,2018 - Says Yes. Later amended on 07-03-2019 by a corrigendum toCircular No 76/50/2018-GST issued by CBIC vide F.No.CBEC- 20/16/04/2018 – Now says No as TCS is aninterim levy.
PSN Automobiles Private Limited Vs. UOI & CBIC (Kerala High Court atErnakulam)
CA Gagan Kedia | [email protected] | 5
Mandatory Inclusions – 15(2)(b)
•Issue:
In the case of Shri Nawodit Agarwal (GST AARChattisgarh) it was held that GST is to be charged by thesupplier on the freight amount, including the cost ofdiesel which was paid by the recipient of the supply.
CA Gagan Kedia | [email protected] | 6
DISCOUNT vs. BAD DEBTS vs. 3rd PARTY FLOW
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HOW IS DISCOUNT DIFFERENT FROM BADDEBTS ?
One is unilateral, while the Other is bi-lateral. GST benefit available for one, while not for another. One is pre-determined, while the other is Payment-linked contingency. Discounts in kind.
CA Gagan Kedia | [email protected] | 7
DISCOUNTS
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Issue:Issuance of single credit note against multiple originalinvoice. Free Supplies:
Buy 1 Get 1Gift To Dealers
WHAT EXACTLY IS A FREE GIFT ?
CA Gagan Kedia | [email protected] | 8
AIR TICKETING VALUATION
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Issue:Valuation @ 5%/10% of base fare.Is it mandatory or optional ?
CA Gagan Kedia | [email protected] | 9
Second Hand Goods - VALUATION
Rajasthan AAR in the case of M/s Shambhu Traders PrivateLimited Facts of the case: The applicant was engaged in the businessof selling used lead batteries to various manufacturers andwas operating under Rule 32(5) of CGST Rules 2017. TheApplicant purchased these used lead acid batteries fromunregistered suppliers in small quantity and subsequently soldthem to various manufacturers and charged GST on thedifference between the sale price and purchase price of leadacid batteries. Can it be used for sale of second hand company vehicle?(Minor process + No ITC)
MRG KEDIA & CO. – GST BASICS| .10
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1.2.3.4.
Supplier Acts as Pure Agent (PA) when making payment to3rd Party on Authorisation.
Separately indicated in invoice.
G/S procured as PA are in addition to your main G/S
WHO IS PA ?
Enter into contractual agreement to act as PA.
Neither intends, nor holds title to G/S so procured.
DOES NOT USE the G/S for his own interest
NO Mark Up on the reimbursement.
Rule 33 – PURE AGENT
MRG KEDIA & CO. – GST BASICS| .11
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WRITE OFF of fixed Assets vs. DISPOSAL . Scrap allowed to be sold by JW may impact thevalue of JW charges. Market Penetration Strategy vs. Sale in Slup periodlike Covid-19. Charity by giving free vs. charity by giving at lowerrate.
SOME CONTENTIOUS ISSUES
For any queries, feel free to contact -
CA GAGAN KEDIA,Partner – Indirect TaxMRG KEDIA & CO.(Chartered Accountants)Unit No. 408, 4th Floor, Kamalalaya Centre156A, Lenin Sarani, Dharamtalla, Kol-13
# 98306 82188 ; [email protected]
CA GAGAN KEDIA | MRG KEDIA & CO | 12
THANK YOUTHANK YOU
