Valuation of goods under GST -

[MohanLal tiwari]

Dear Experts,

We have an order for manufacture & supply of machinery wherein customer is providing some free issue imported spares but the custom duty and clearing charges etc are being paid by us. As per Excise valuation Rules, the landed cost of such free issue was included in assesable value.

Kindly advise whether the free issue mtls value is to be included in value for charging GST. As per section 5 of IGST Act read with section 15 of the CGST Act“ 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.”

AI Summary

Free Issue Materials Must Be Included in GST Valuation Unless Already Priced; Customs Duty Clarification Needed A query was raised about whether the value of free issue materials provided by a customer should be included in the valuation for GST purposes. According to the IGST and CGST Acts, the transaction value should include any amounts incurred by the supplier but paid by the recipient, such as free issue materials, unless already included in the price. One respondent noted that the integrated tax on imported goods is determined by the Customs Tariff Act. Another respondent questioned how custom duty and clearing charges could be paid by the supplier when the materials are imported by the recipient.