Example: - 14

A entered into contract with B for Supply of goods. Good valued at Rs. 112000. The contract specifies amount for sale of goods and in addition also provides for delivery at the premises of B. A hires a transport and obtained transit insurance for goods. Amount charged by transporter Rs.1500. What is the value of goods for the purpose of GST.

Now in this  example, lorry receipt indicates that freight and insurance charges are payable by B. Thus, B making payment for such expenses. What is the value of goods in this situation?

Ans.  As A is making payment to transporter, actually the payment is made by B. Contract for supply also provides that it is the obligation of A. Obligation of supplier in relation to supply when paid by recipient shall be included in the price actually paid or payable for supply of  Rs. 113500.