Suggestions on GST Acts (July 2017) by Institute of Chartered Accountants of India
16. Manner of determination of amount liable to be paid by the supplier
Section 15(2)(b) of the CGST Acts provides that the value of supply shall include 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
Issue:
Since the value of supply includes an amount liable to be paid by the supplier but incurred by the buyer, the basis for determination of the amount liable to be paid by supplier is not specifically mentioned herein. It could lead to large scale litigations if the amount to be determined is left open to the discretion of taxpayers.
Suggestion:
Therefore, it is suggested that the amount liable to be paid by supplier could have a reference to the contract or agreement between suppliers and recipient by the words ‘by reason of or in connection with’. So, supplier’s liability should be restricted within the scope of the contract or agreement.
Read ICAI Suggestions on GST Act to Govt : July 2017
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