GST Valuation (Determination of the Value of Supply of Goods and Services) Rules, 2016
1. Short title, commencement and application.
(1) These rules may be called the GST Valuation (Determination of Value of Supply of Goods and Services) Rules, 2016.
(2) These Rules shall come into force on the day the Act comes into force.
(3) They shall apply to the supply of goods and/or services under the IGST/CGST/SGST Act.
2. Definitions
(1) In these rules, unless the context otherwise requires:
(a) “Act” means the IGST Act or the CGST Act or, as the case may be, the SGST Act;
(b) “goods of like kind and quality” means goods which are identical or similar in physical characteristics, quality and reputation as the goods being valued, and perform the same functions or are commercially interchangeable with the goods being valued and supplied by the same person or by a different person;
(c) “services of like kind and quality” means services which are identical or similar in nature, quality and reputation as the services being valued and supplied by the same person or by a different person; and
(d) “transaction value” means the value of goods and/or services within the meaning of section 15 of the CGST Act.
(2) Words, expressions and terms not defined in these Rules shall have the same meaning as is assigned to them in the Act.
3. Methods of determination of value
(1) Subject to rule 7, the value of goods and/or services shall be the transaction value.
(2) The “transaction value” shall be the value determined in monetary terms.
(3) Where the supply consists of both taxable and non-taxable supply, the taxable supply shall be deemed to be for such part of the monetary consideration as is attributable thereto.
(4) The transaction value shall be accepted even where the supplier and recipient of supply are related, provided that the relationship has not influenced the price.
(5) Where goods are transferred from— (a) one place of business to another place of the same business, (b) the principal to an agent or from an agent to the principal, whether or not situated in the same State, the value of such supply shall be the transaction value.
(6) The value of supplies specified in sub-section (4) of section 15 of the Act shall be determined by proceeding sequentially through rules 4 to 6.
4. Determination of value of supply by comparison
(1) Where the value of a supply cannot be determined under rule 3, the value shall be determined on the basis of the transaction value of goods and/or services of like kind Page 160 of 190 and quality supplied at or about the same time to other customers, adjusted in accordance with the provisions of sub-rule (2).
(2) In determining the value of goods and/or services under sub-rule (1), the proper officer shall make such adjustments as appear to him reasonable, taking into consideration the relevant factors, including-
(a) difference in the dates of supply,
(b) difference in commercial levels and quantity levels,
(c) difference in composition, quality and design between the goods and/or services being valued and the goods and/or services with which they are compared,
(d) difference in freight and insurance charges depending on the place of supply.
5. Computed value method
If the value cannot be determined under rule 4, it shall be based on a computed value which shall include the following:-
(a) the cost of production, manufacture or processing of the goods or, the cost of provision of the services;
(b) charges, if any, for the design or brand;
(c) an amount towards profit and general expenses equal to that usually reflected in supply of goods and/or services of the same class or kind as the goods and/or services being valued which are made by other suppliers.