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

Valuation of supply under GST: include free issue materials' value in transaction value when not reflected in price.
Valuation under GST must include amounts the supplier is liable to pay but which the recipient has paid; free issue materials supplied by a customer should be included in the transaction value if not already reflected in the price. For imports, integrated tax is levied on the customs valuation at the point duties are assessed, making the landed/customs value of free issue imported spares relevant to GST valuation; where the transaction value already includes those materials, no further addition is needed.