Value of Taxable Supply
Section 15, CGST Act
Straight from CBIC
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The value on which GST is charged is the transaction value – the price actually paid or payable – where the parties are unrelated and price is the sole consideration. It includes other taxes, recipient-borne costs, incidental charges, interest/late fees and non-government subsidies; it excludes discounts recorded on the invoice and pre-agreed post-supply discounts given by credit note where the buyer reverses the ITC. Related-party or non-monetary supplies are valued under the Valuation Rules (Rule 27-35).
What this means in practice
The parts that actually decide cases — the things a practitioner checks first.
Post-supply discounts are deductible ONLY if agreed before or at the time of supply, linked to the specific invoices, and the buyer reverses the corresponding credit – all three, or the deduction fails.
Section 15(3)(b) reversal by the buyer is now evidenced through the credit-note flow in the Invoice Management System; keep the acknowledgement.
Related-party and distinct-person supplies go to Rule 28, where the invoice value is accepted as open market value if the recipient is entitled to full credit – the practical answer for most intra-group billing.
A corporate guarantee to a related person is valued under the second proviso to Rule 28 at one per cent of the amount guaranteed or the actual consideration, whichever is higher.
Subsidies from the Central or State Government are excluded from value; any other subsidy linked to the price is included.
From 01-02-2026 Rule 31D values pan masala and tobacco products on retail sale price, not transaction value.
Questions people actually ask
Real questions we get on this provision, answered straight.
Our head office bills branches in other States for shared costs. What value do we use?+
Rule 28 applies because they are distinct persons. Where the receiving branch can take full input tax credit, whatever value you put on the invoice is deemed to be the open market value – so a reasonable cross-charge is accepted, provided the invoice actually issues and tax is paid.
We give our dealers a quarterly turnover discount. Is it deductible?+
Only if the discount was agreed before or at the time of supply, can be linked to the specific invoices, and the dealer reverses the credit attributable to it. A discount decided after the event, however commercially standard, is not deductible from value.
How this provision is built
The skeleton, clause by clause — useful when a notice cites a specific sub-clause.
The exact words of the law
3,726 characters, uneditedReproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.
Read the full provision+
(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 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 1 [
(b) after the supply has been effected, if for such discount, a credit note has been issued by the supplier and input tax credit as is attributable to such discount has been reversed by the recipient of the supply, in accordance with the provisions of section 34.]
(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.
High Court cases on this section
Judgments in our index that cite this provision. Being listed does not make a case good law — it may have been appealed or distinguished since. Read it before relying on it.
GU Shipping India Pvt Ltd v. The Assistant Commissioner of CGST and Central Excise
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M/S. MICRO LABS LIMITED v. JOINT COMMISSIONER OF CENTRAL GST
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M/s.Supreme Parradise v. Assistant Commissioner (ST)
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T.V.Sundaram Iyengar and Sons Limited v. The Assistant Commissioner (ST)
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M/s. Indian Ocean Sands Company (P) Ltd v. The Assistant Commissioner (ST)
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M/S SHRI ANNAPOORNESHWARI HOSPITALITY SERVICES v. THE COMMERCIAL TAX OFFICER , VAT AUDIT-2
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What changed, and when
The amendment trail, newest first — because the version that applies to your case depends on the period.
date not stated · Substituted
Substituted (w.e.f. yet to be notified) by section 153 of The Finance Act, 2026 No. 4 of 2026 dated 30.03.2026.
Where this comes from
Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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