as per section 15 of cgst act" invoice value is nothing but transaction value for the purpose of gst , both supplier and recepient should not be related.
so if we sale goods at loss at our own discretion due to some commitment . will the govt asks us that y u have sold at loss....?
and here price is the only consideration.
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Transaction value in gst
Replies (3)
Following is the extract of section 15(3) of CGST ACT
[3] The value of the supply shall not include any discount which is given--
[a] before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and
[b] after the supply has been effected, if-
[i] such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and
[ii] input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply.
In case you fulfil these conditions, then for the purpose of computation of GST liability you can dedicated discount given from the invoice value and charge GST on net value.
Otherwise, GST os required to be paid on entire invoice value.
Trust this clarifies
Regards,
Nihit
[3] The value of the supply shall not include any discount which is given--
[a] before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and
[b] after the supply has been effected, if-
[i] such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and
[ii] input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply.
In case you fulfil these conditions, then for the purpose of computation of GST liability you can dedicated discount given from the invoice value and charge GST on net value.
Otherwise, GST os required to be paid on entire invoice value.
Trust this clarifies
Regards,
Nihit
In my view, where the parties are not related and price is the sole consideration, then the transaction value would be considered even if it is sold at loss. Further, there would not be any requirement for reversal of credit also
As far as section 15 is concerned, the value of a supply of goods or services or both shall be the transaction value,
which is the price actually paid or payable for the said supply of goods or services or both
• where the supplier and the recipient of the supply are not related; and
• the price is the sole consideration for the supply.
As you mentioned here that price is sole consideration. So in my opinion, if you satisfy other condition also i.e. parties are not related, then I don't think that there should be any issue selling goods at loss.
which is the price actually paid or payable for the said supply of goods or services or both
• where the supplier and the recipient of the supply are not related; and
• the price is the sole consideration for the supply.
As you mentioned here that price is sole consideration. So in my opinion, if you satisfy other condition also i.e. parties are not related, then I don't think that there should be any issue selling goods at loss.
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