Valuation of Cross Charge

[THDC India]

Dear Expert,

Kindly share your valuable opinion on following matter:

While cross charge, whether GST component should be reduced from the taxable value due to provision of section 15(2)(a) and thereafter GST should be levied on value obtained after reducing GST component.

AI Summary

Debate on GST Valuation: Should GST Component Be Deducted Before Taxable Value? Referencing Section 15(2)(a) CGST Act. A discussion on a forum revolves around the valuation of cross charges under the Goods and Services Tax (GST) framework. The initial query questions whether the GST component should be deducted from the taxable value before applying GST, referencing Section 15(2)(a) of the CGST Act. Responses vary: one expert states no deduction is allowed, citing relevant sections and rules, while another mentions that any value can be adopted if the recipient is eligible for full credit. Further clarification is sought on this point, and a concern is raised about the cascading effect of tax if the GST component is not reduced.