Strap Ltd., a registered supplier, has supplied machinery to Defend Ltd. (a supplier registered in the same State). It provides following…

Computation of value of taxable supply made by Strap Ltd. to Defend Ltd. Particulars Amount (₹) Price of machinery (exclusive of taxes and discounts) 5,50,000 Amount paid by Defend Ltd. directly to the supplier for the part fitted in the machinery 20,000 [Any amount that the supplier is liable to pay in relation to a supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods is includible in the value of supply in terms of section 15(2)(b).] Installation and testing charges 25,000 [Any amount charged for anything done by the supplier in respect of the supply of goods at the time of/before delivery of goods is includible in the value of supply in terms of section 15(2)(c).] Less: Discount @ 2% on the price of machinery [₹ 5,50,000 x 2%] 11,000 [Since discount is given at the time of supply of machinery and recorded in the invoice, the same is deductible from the value of the supply in terms of section 15(3)(a).] Less: Additional 1% discount at year end Nil [Though the additional discount is established before/at the time of supply, it is not deductible from the value of supply in terms of section 15(3)(b) as the same is not linked to any specific transaction and is adjusted by the parties at the end of the financial year.] Value of taxable supply 5,84,000