GST valuation for supervision-only supply excludes recipient-paid material and execution costs from taxable value.

Under GST valuation rules, where an applicant supplies only supervision services for deposit work on electric line installation and the recipient arranges and pays for the material and execution through third-party contractors, the recipient-borne cost is not part of the applicant's taxable value. The supervision charges constitute the sole consideration for the applicant's own supply, and costs paid to others do not become includible merely because the completed infrastructure is later handed over or used in the applicant's system. GST is therefore payable only on the supervision charges.

---

---

Issues: Whether, in the case of deposit work for installation of electric lines, the value of material and execution cost borne by the recipient is includible in the taxable value under GST when the applicant receives only supervision charges.

Analysis: The supply in question was confined to supervision by the applicant, while the material and execution of the installation work were arranged and paid for by the recipient through third-party contractors. The amount received by the applicant as supervision charges constituted consideration for its own supply, but the cost of the works executed by others was not consideration paid to the applicant and did not fall within the applicant's taxable value merely because the infrastructure was ultimately handed over or used in the applicant's system. On these facts, the valuation provisions did not permit inclusion of the recipient-borne material and execution cost in the applicant's supply value.

Conclusion: The value of material and execution cost is not includible in the taxable value of the applicant's supply, and GST is payable only on the supervision charges.

---