TaxTMI 
TaxTMI 
If a company sells goods to Government and receives a price-linked subsidy from a PSU on behalf of the Government (not directly from the Govt.), should such subsidy be excluded from the value of supply under Section 15(2)(e) of the CGST Act (which excludes subsidies provided by Central/State Government)
GST—Value of Supply & Government Subsidy Routed via PSU
21 Feb 2026 
6 Replies 
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Subsidy routed via PSU may not be excluded from value of supply under GST where PSU does not act as the government.
Whether a price linked payment routed by a public sector unit on behalf of the Government is excluded from the value of supply under the government subsidy exclusion turns on the payment's legal character, the PSU's role (sovereign agent versus independent payer), and the contract terms allocating the payment; commercial discounts are distinct from sovereign or institutional subsidies and cannot be conflated. (AI Summary)
Whether a price linked payment routed by a public sector unit on behalf of the Government is excluded from the value of supply under the government subsidy exclusion turns on the payment's legal character, the PSU's role (sovereign agent versus independent payer), and the contract terms allocating the payment; commercial discounts are distinct from sovereign or institutional subsidies and cannot be conflated. (AI Summary)