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GST – Karnataka AAR - Section 2(31) and Section 15(2)(e) of CGST Act, 2017 – Subsidy, Valuation – Applicant intends to supply of machineries and industrial boilers to M/s Chinnapuri Silks (Recipient) who are eligible for subsidy from Central Government and State Government - Whether the subsidy received from the Central / State Government is liable to be excluded from the value for the purpose of arriving at the GST liability – HELD – Section 15(1) of the CGST Act, 2017 stipulates that the value of the supply of goods or services or both shall be 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 - In the instant case, the supplier and the recipient are not related and the price is the sole consideration for the supply and thus the transaction value becomes the value of supply. The transaction value is the value of supply and the supplier raises the invoice for full amount i.e. for the full value of the goods being supplied - Under Section 15(2)(e) of the Act, only the subsidies provided by Central Government and State Governments which are directly linked to the price and affects the price of supply are not a part of value of supply - In the instant case, the applicant-supplier raises the invoice for the full contract price and even if the recipient is not provided subsidy, the contract price is still recoverable from the recipient. Subsidies provided by State Govt or Central Govt in the escrow account are not separately recoverable by the applicant, but are part of the price payable by the recipient. Thus, there does not arise a situation where the subsidies are to be added separately to the transaction value or value of supply payable by the recipient. Also, for the same reason, the subsidy is not affecting the price of supply - Hence the exclusion provided in Section 15(2)(e) is not applicable in the instant case and the subsidies provided by Central Government and State Governments is includible in determining the value of supply – Ordered accordingly
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