M/s Alpha Tech Ltd., a registered supplier, supplies machinery to Beta Ltd. (registered in the same State). It furnishes the following details in…
CA Intermediate · Taxation · MTP · May 2026
M/s Alpha Tech Ltd., a registered supplier, supplies machinery to Beta Ltd. (registered in the same State). It furnishes the following details in respect of the said supply: S. No. Particulars Amount (₹) (i) Price of machinery (exclusive of taxes and discounts) 5,50,000 (ii) Packing charges 15,000 (iii) Subsidy received from Nav Chetna Jagriti Trust [Subsidy is directly linked to the price of the machinery supplied.] 50,000 (iv) Freight charges for delivery of the machine [M/s Alpha Tech Ltd., has agreed to deliver the machinery at Beta Ltd. premises] 2,000 (v) Late fees for delayed payment inclusive of GST [Beta Ltd. paid the late fees. However, these charges were ultimately waived by M/s Alpha Tech Ltd., and the amount was refunded to Beta Ltd. during the same month] 1,000 (vi) Discount @ 2% on price of the machinery mentioned at S. No. (i) above (recorded in the invoice) Note: Price of the machinery is net of the subsidy received. Determine the value of taxable supply made by M/s Alpha Tech Ltd. to Beta Ltd.
Suggested Answer and Working Notes:
Computation of value of taxable supply made by M/s Alpha Tech Ltd.to Beta Ltd. Particulars Amount (₹) Price of the machinery 5,50,000 Packing charges [Being incidental expenses, the same are includible in the value as per section 15(2)(c)] 15,000 Subsidy received from Nav Chetna Jagriti Trust [Since the subsidy is received from a non-Government body and directly linked to price, the same is includible in the value in terms of section 15(2)(e)] 50,000 Freight charges for delivery of the machinery [Since arranging freight is the liability of supplier, it is a case of composite supply and thus, freight charges are includible in the value of principal supply.] 2,000 Late fees for delayed payment [Not includible since the same is waived off] Nil Total 6,17,000 Less: Discount @ 2% on the price of machinery [₹ 5,50,000 x 2%] [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).] 11,000 Value of taxable supply 6,06,000
Topics: Paper 3B: Goods and Services Tax
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