Valuation of Supply of goods or services or both under Goods and Service Tax (GST) including Section 15 & Valuation Rules (Rule 1 to Rule 8) as issued by GST Council. I tried my best to make them as compact and understandable as well as much as I can. Please do give your valuable feedback in case you think it can be improved. Every feedback is welcomed. Thanks

1. Section 15: Value of Taxable Supply
VALUE OF SUPPLY = TRANSACTION VALUE, provided following condition being satisfied:
(a) Price is the sole consideration.
(b) Supplier and recipient are not Related.
Inclusions, while calculating T.V Exclusions
(a) Any taxes, duties, cesses, fees and charges under
any law which is in force other than GST.
(b) Amount incurred by Recipient in relation to such supply. DISCOUNT, in normal course of business
(c) Incidental Expenses in relation to such supply.
(d) Any Interest, late fee or penalty for delay payment of consideration.
(e) Directly linked subsidies other than government subsidies. Provided before or Provided after
at the time of supply supply
If discount has been duly (a) Should be as per terms of agreement
recorded in invoice. (b) ITC attributable to such discount has
been reversed
Applicability of Valuation Rules: if (a) Transaction Value is not Reliable.
(b) Consideration wholly or partially not in money. In this case Valuation Rules will apply.
(c) Parties are Related
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2. Valuation Rules GST
Rule 1 to Rule 8
RULE-1 (Consideration not wholly in money): The value of the supply shall:
(A)
Open market value (C) (D)
of such supply : #### Value of Goods or Services Application of Rule-4
(B) or Both of like Kind & Quality or Rule-5 in that order
Consideration in Money : ####
Money equivalent to
consideration not in
money : ####
####
If open market
value not
Available if (A) & (B) both not applicable
if value is not determinable under clause (A) or clause (B) or clause (C)
Illustration 1: Where a new phone is supplied for Rs.20000 along with the exchange of an old phone and if the price of the new phone without exchange
is Rs.24000, the open market value of the new phone is Rs 24000.
Illustration 2: Where a laptop is supplied for Rs.40000 along with a barter of printer that is manufactured by the recipient and the value of the printer
known at the time of supply is Rs.4000 but the open market value of the laptop is not known, the value of the supply of laptop is Rs.44000
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3. Rule-2 : Supply between distinct or related persons, other than through an agent
The Value of Supply Shall:
The Open Market Value
of such supply.
if value is not determinable
under clause (a) or (b)
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(a) Open Market Value
of such supply
(b) Value of Supply of
Goods & Services of like
and quality.
If open market
value not
available as per
clause (a)
(c) : Value as determined by
application of Rule 4 or Rule
5, in that order.
Provided that where goods are
intended for further supply as such
by the recipient, the value shall, at
the option of the supplier, be an
amount equivalent to ninety
percent of the price charged for
the supply of goods of like kind
and quality by the recipient to his
customer not being a related
person
Provided further that where the recipient
is eligible for full input tax credit, the
value declared in the invoice shall be
deemed to be the open market value of
goods or services:

4. Rule:3 Value of supply of goods made or received through an agent
The value of supply of goods between the principal and his agent shall:
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(a): Be the open market value of the goods being supplied,
or
At the option of the supplier, be 90% of the
price charged for the supply of goods of like kind and quality
by the recipient to his customer not being a related person,
where the goods are intended for further supply by the said
recipient;
(b): where the value of a supply is not
determinable under clause (a), the
same shall be determined by
application of Rule 4 or Rule 5 in that
order.
Illustration: Where a principal supplies groundnut to his agent and the agent is supplying
groundnuts of like kind and quality in subsequent supplies at a price of Rs.5000 per quintal on the
day of supply. Another independent supplier is supplying groundnuts of like kind and quality to the
said agent at the price of Rs.4550 per quintal. The value of the supply made by the principal shall
be Rs.4550 per quintal or where he exercises the option the value shall be 90% of the Rs.5000 i.e. is
Rs.4500 per quintal.

5. Rule 4 & Rule 5
Rule 4 Rule 5
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Where the value of a supply of goods or
services or both is not determinable by any of
the preceding rules, the value shall be 110% of
the cost of production or manufacture or cost
of acquisition of such goods or cost of
provision of such services.
Where the value of supply of goods or services
or both cannot be determined under rules 1 to 4,
the same shall be determined using reasonable
means consistent with the principles and general
provisions of section 15 and these rules
Provided that in case of supply of
services, the supplier may opt for this
rule, disregarding rule 4

6. Rule 6: Determination of value in respect of certain supplies
Rule 6(2): The value of supply of services in relation to purchase or sale of foreign currency,
including money changing
Option 1 Option 2
When exchanged
from, or to, Indian
Rupees (INR)
Where neither of
the currencies
exchanged is Indian
Rupee (INR)
The value shall be equal to 1% of
the lesser of the two amounts the
person changing the money would
have received by converting any of
the two currencies into Indian
Rupee on that day at the
reference rate provided by RBI.
The value shall be equal to the
difference in the buying rate or the
selling rate, as the case may be, and
the Reserve Bank of India (RBI)
reference rate for that currency at
that time, multiplied by the total
units of currency.
Provided that in case where
the RBI reference rate for a
currency is not available, the
value shall be 1% of the gross
amount of Indian Rupees
provided or received by the
person changing the money.
Amount of currency
exchanged up to Rs.1
lac
1% of the gross
amount of currency
exchanged or Rs.250/-
, whichever is higher
Amount of currency
exchanged exceeding
Rs.1 lac and up to
Rs.10 lacs
Rs.1,000/-plus 0.5% of
the gross amount of
currency exchanged
above Rs.100,000/-
Amount of currency
exchanged exceeding
Rs.10 lacs
Amount of currency
exchanged exceeding
Rs.10 lacs

7. Rule 6(3)-Air Travel Agent Rule 6(4)-Life Insurance Business
• Domestic bookings : 5% of Basic Fare
• International bookings : 10% of Basic Fare
“Basic fare” means that part of the air fare
on which commission is normally paid to the
air travel agent by the airline.
a) Gross premium charged from a policyholder
reduced by the amount allocated for
investment, or savings on behalf of the
policyholder, if such amount is intimated to
the policyholder at the time of supply of
service;
b)In case of single premium annuity policies
other than(a) - 10% of single premium charged
from the policyholder ; or
c) In all other cases ,25% of the premium
charged from the policy holder in the first year
and 12.5% of the premium charged from
policyholder in subsequent years
This shall not apply where the entire premium
paid by the policy holder is only towards the
risk cover in life insurance.

8. Rule 6(5): Buying
and selling of
second hand Goods
Rule 6(6): Token,
Voucher, Coupon or
Stamp
Rule 6(7): Notified supplies
between Distinct Persons
• Supply of used goods as such or after such minor
processing which does not change the nature of the
goods and
• where no ITC has been availed on purchase of such
goods,
• the value of supply shall be the difference between
the selling price and purchase price and
•where the value of such supply is negative it shall be
ignored.
• The value of a token, or a voucher, or a
coupon, or a stamp (other than postage stamp)
• which is redeemable against a supply shall be
• money value of the goods or services
redeemable against such token, voucher,
coupon, or stamp.
• The value of taxable services provided by such class
of service providers
•as may be notified by the Government between
distinct persons, (Entry-2 of Schedule I )
•other than those where ITC is not available under
S.17(5),
•shall be deemed to be NIL
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9. Rule 7: Value of supply of services in case of PURE AGENT
The expenditure or costs incurred by the pure agent (CA) shall be excluded from the value of supply, if all the following
conditions are satisfied, namely-
a) Pure agent (CA) makes payment to the third party (ROC) on behalf of recipient (Company R) as the contract is between third
party (ROC) and recipient (Company R),
b) Recipient (Company R) uses the services procured by pure agent (CA).
c) Recipient (Company R) is liable to make payment to third party (ROC).
d) Recipient (Company R) authorizes pure agent (CA) to make payment on his behalf.
e) Recipient (Company R) knows that the services for which payment has been made by pure agent (CA) shall be provided by
third party (ROC).
f) Payment made by pure agent (CA) on behalf of recipient (Company R) has been separately indicate din invoice issued by pure
agent (CA) to recipient ( Company R)
g) Pure agent (CA) recovers from recipient (Company R) only such amount as has been paid by him to third party (ROC).
h) Services procured by pure agent (CA) from third party (ROC) are in addition to supply he provides on his own account.
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10. Rule 8:Rate of exchange of currency, other than
INR, for determination of value
• Rate of exchange shall be applicable reference
rate for that currency as determined by RBI on
the date when point of taxation arises as per
S.12 and S.13.
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