When you sell something, GST is charged on the value of supply. Most of the time, that's simply the price the buyer pays — called the transaction value under Section 15 of the CGST Act. But what if the buyer pays partly in goods? Or the buyer and seller are relatives fixing a cozy low price? That's exactly when the CGST (Determination of Value of Supply) Rules, 2017 (Rules 27–35) kick in — they are the backup valuation mechanism.
Think of these rules as a waterfall: you only move to the next rule when the previous one fails. Rule 27 applies when consideration is not wholly in money. First try the open market value (OMV) — what an unrelated buyer would pay in cash for the same supply. If OMV isn't available, add the cash part and the money-equivalent of the non-cash part. Still stuck? Jump to Rules 30 or 31. Rule 28 covers supplies between related persons or distinct persons (e.g., Delhi HO to Mumbai branch). Use OMV — but exam favourite alert: if the recipient is eligible for full Input Tax Credit (ITC), even the invoice value is acceptable. Rule 29 covers supply through an agent: value is either OMV at the agent's place, OR 90% of the price the agent charges to the end customer — supplier's choice. Rule 30 is the clean, exam-friendly cost-based method: Value = Cost of production or acquisition + 10%. Use this when Rules 27–29 don't work. Rule 31 is the last resort — any reasonable method consistent with Section 15 principles.
Three special rules you must not skip: Rule 32 covers specific transactions — money changers (forex), travel agents, second-hand goods dealers, and tokens/vouchers each have tailored valuation. Rule 33 deals with the pure agent — if a supplier incurs costs purely on behalf of the recipient (like customs duty paid on their behalf), those reimbursements are excluded from the value of supply, provided specific conditions are met. Rule 35 is used when the price is GST-inclusive: back-calculate as Value = (Gross Amount × 100) ÷ (100 + GST rate%). This topic is examined frequently as a 5–8 mark scenario question where you must identify which rule applies and calculate the taxable value step by step.