Rule 42 of GST act

Question

Rule 42 of GST act

Accepted Answer

Rule 42 of GST act pertains to the manner of determination of value of supply of goods or services or both.

Rule 42 provides the guidelines for determining the value of supply of goods or services or both.
It specifies the inclusion and exclusion of certain elements while calculating the value of supply.
The value of supply includes taxes, duties, fees, and charges levied under any law.
The value of supply excludes discounts, subsidies, and incentives provided by the supplier.
For example, if a supplier sells goods worth Rs. 10,000 and offers a discount of Rs. 500, the value of supply will be Rs. 9,500.
The rule also provides for the determination of value in case of related parties and goods sent on approval basis.
It is important for businesses to comply with Rule 42 to avoid any penalties or legal issues.

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