Chapter IV - Time and value of supply
Section 15
Section 15: Value of taxable supply
Section 15 starts with transaction value: the price actually paid or payable when supplier and recipient are unrelated and price is the sole consideration. It then adds specified amounts and excludes only qualifying discounts.
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This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply.
(2) The value of supply shall include–– (a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier; (b) any amount that the supplier is liable to pay in relation to such 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 or services or both; (c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services; (d) interest or late fee or penalty for delayed payment of any consideration for any supply; and (e) subsidies directly linked to the price excluding subsidies provided by the Central Government and the State Governments.
Explanation.––For the purposes of this sub-section, the amount of subsidy shall be included in the value of supply of the supplier who receives the subsidy.
(3) The value of the supply shall not include any discount which is given–– (a) before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and (b) after the supply has been effected, if— (i) such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and (ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply.
(4) Where the value of the supply of goods or services or both cannot be determined under sub-section (1), the same shall be determined in such manner as may be prescribed.
(5) Notwithstanding anything contained in sub-section (1) or sub-section (4), the value of such supplies as may be notified by the Government on the recommendations of the Council shall be determined in such manner as may be prescribed.
Explanation.—For the purposes of this Act,–– (a) persons shall be deemed to be “related persons” if–– (i) such persons are officers or directors of one another’s businesses; (ii) such persons are legally recognised partners in business; (iii) such persons are employer and employee; (iv) any person directly or indirectly owns, controls or holds twenty-five per cent. or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii) they are members of the same family; (b) the term “person” also includes legal persons; (c) persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be deemed to be related.
Introduction
The statutory value may include other taxes, supplier liabilities paid by the recipient, incidental charges, delayed-payment additions and price-linked non-government subsidies. Discounts have separate before/at-supply and post-supply tests. If ordinary transaction value cannot be used, current prescribed valuation rules or notified special methods apply.
Key takeaways
Price is the starting point, not always the end
Transaction value applies only where parties are unrelated and price is the sole consideration.
Add statutory items
Review recipient-paid supplier liabilities, incidental charges, delayed-payment amounts and directly price-linked subsidies, alongside the listed taxes and duties.
Post-supply discounts have strict conditions
An earlier agreement, invoice link and recipient reversal of attributable ITC are required for subsection (3)(b) exclusion.
Related-party and special values need Rules
Where subsection (1) cannot determine value, or a notified special supply is involved, the prescribed method controls.
Test transaction value
Confirm the actual price, relationship of parties and whether any non-price consideration exists. Section 15's explanation deems various officers/directors, partners, employer/employee, controlled entities, family members and sole agents/distributors/concessionaires related in defined circumstances.
Add amounts required by subsection (2)
Reconcile separately charged non-GST taxes and duties, supplier obligations borne by the recipient, commissions and packing, pre-delivery charges, delayed-payment interest/late fee/penalty and directly price-linked subsidies. The subsidy is included in the receiving supplier's value.
Deduct qualifying discounts
A discount before or at supply must be recorded in the invoice. A later discount must arise from an agreement made at or before supply, link to relevant invoices, and have recipient reversal of the attributable ITC based on the supplier document.
Use prescribed valuation when necessary
If relationship or non-price consideration prevents transaction value, subsection (4) sends valuation to current Rules. Subsection (5) also permits notified classes of supplies to use prescribed special methods.
Practical checklist
Do
- Keep contracts, price build-up and related-party analysis.
- Link post-supply discounts to original invoices and recipient ITC reversal.
- Check current valuation Rules for non-standard supplies.
Avoid
- Treat every invoice total as the taxable value automatically.
- Exclude a post-supply discount without the statutory agreement and ITC conditions.
- Use ordinary transaction value for related parties without applying the relevant method.
Frequently asked questions
Can a post-sale discount reduce GST value?
Only if the subsection 15(3)(b) conditions are met, including a pre-existing agreement, specific invoice link and recipient reversal of attributable ITC.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026