# Section 15 – Value of Supply: Introduction & Transaction Value
## Why Valuation Matters
- GST is levied ad valorem (i.e., as a % of value of supply).
- Correct valuation drives correct CGST + SGST/UTGST and IGST.
- Section 15 of the CGST Act + Chapter IV of CGST Rules, 2017 comprehensively govern valuation.
## Scope of Section 15
| Sub-section | Coverage |
|---|---|
| 15(1) | Supplies for money price between unrelated persons |
| 15(2) | Inclusions in value |
| 15(3) | Exclusions (discounts) |
| 15(4) | Non-monetary / part non-monetary / related person supplies — referred to Rules |
| 15(5) | Specified categories of goods/services notified |
## Sec 15(1) – Transaction Value
> The value of supply shall be the transaction value = the price actually paid or payable, where:
> (a) supplier and recipient are NOT related, AND
> (b) price is the sole consideration.
### Twin Conditions
1. Unrelated parties (per Sec 15 Explanation — same as discussed in supply chapter)
2. Price is the sole consideration — no non-monetary element
### Meaning of Price Paid or Payable
- The price for the specific supply being valued.
- Includes amounts already paid + amounts payable.
- "Payable" = the agreed price (not a market or notional figure).
### Consequence
- If both conditions are met → invoice price = transaction value = value of supply.
- If either fails → step out to Sec 15(4) → Valuation Rules.