Rules Rule 35 of CGST Rules i.e Value of supply inclusive of integrated tax, central tax, State tax, Union territory tax
Financial Year: 2017
Rule 35 of CGST Rules
Value of supply inclusive of integrated tax, central tax, State tax, Union territory tax
Where the value of supply is inclusive of integrated tax or, as the case may be, central tax, State tax, Union territory tax,
the tax amount shall be determined in the following manner, namely,-
Tax amount = (Value inclusive of taxes X tax rate in % of IGST or, as the case may be, CGST, SGST or UTGST) ÷ (100+ sum of tax rates, as applicable, in %)
Example:-
If there is a mobile phone with GST Rate of 12%,
Total Price (Including Taxes) is Rs 1120
and we want to calculate tax amount,
Answer:-
Tax Amount = 1120*12/(100+12) = 120 Rs
Alternatively we can calculate Base value as follows:-
Basic Price(without Taxes) = 1120/(100%+12%) = Rs 1000/-
100% is constant and 12% is variable i.e. tax rate in question.
Tax Amount = Base price * Tax Rate
= 1000*12% = Rs 120/-
Explanation.-For the purposes of the provisions of this Chapter, the expressions-
(a) open market value of a supply of goods or services or both
means the full value in money,
excluding the integrated tax, central tax, State tax, Union territory tax and the cess
payable by a person in a transaction,
where the supplier and the recipient of the supply are not related
and the price is the sole consideration,
to obtain such supply at the same time when the supply being valued is made;
(b) supply of goods or services or both of like kind and quality
means any other supply of goods or services or both
made under similar circumstances
that, in respect of the
characteristics, quality, quantity, functional components, materials, and the reputation of the goods or services or both first mentioned,
is the same as, or closely or substantially resembles,
that supply of goods or services or both.
Thanks
CA Rahul Gupta