Latest Rule 35 of CGST Rules 2017 Archives - Tax Heal https://www.taxheal.com/tag/latest-rule-35-of-cgst-rules-2017 Complete Guide for Income Tax and GST in India Mon, 25 May 2026 11:37:21 +0000 en-US hourly 1 https://wordpress.org/?v=7.0.4 Rule 35 CGST Rules 2017 : Value of supply inclusive of integrated tax, Central tax, State tax, Union territory tax https://www.taxheal.com/rule-35-cgst-rules-2017.html https://www.taxheal.com/rule-35-cgst-rules-2017.html#comments Fri, 14 Jul 2017 07:58:31 +0000 http://taxheal.com/?p=38692 Rule 35 CGST Rules 2017 Summary of Rule 35 CGST Rules 2017 ( Rule 35 CGST Rules 2017 explains Value of supply inclusive of integrated tax, Central tax, State tax, Union territory tax and is covered in Chapter IV  –  Determination of Value of Supply  : Inserted by the Central Goods and Services Tax (Second Amendment) Rules, 2017, w.e.f. 1-7-2017 ) Rule 35… Read More »

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Summary of Rule 35 CGST Rules 2017

( Rule 35 CGST Rules 2017 explains Value of supply inclusive of integrated tax, Central tax, State tax, Union territory tax and is covered in Chapter IV  –  Determination of Value of Supply  : Inserted by the Central Goods and Services Tax (Second Amendment) Rules, 2017, w.e.f. 1-7-2017 )

Rule 35 CGST Rules 2017

Value of supply inclusive of integrated tax, Central tax, State tax, Union territory tax

35. Where the value of supply is inclusive of integrated tax or, as the case may be, Central tax, State tax, Union territory tax, the tax amount shall be determined in the following manner, namely,—

Tax amount = (Value inclusive of taxes X tax rate in % of IGST or, as the case may be, CGST, SGST or UTGST) ÷ (100 + sum of tax rates, as applicable, in %)

Explanation.—For the purposes of the provisions of this Chapter, the expressions—

(a) “open market value” of a supply of goods or services or both means the full value in money, excluding the Integrated tax, Central tax, State tax, Union Territory tax and the cess payable by a person in a transaction, where the supplier and the recipient of the supply are not related and the price is the sole consideration, to obtain such supply at the same time when the supply being valued is made;
(b) “supply of goods or services or both of like kind and quality” means any other supply of goods or services or both made under similar circumstances that, in respect of the characteristics, quality, quantity, functional components, materials, and the reputation of the goods or services or both first mentioned, is the same as, or closely or substantially resembles, that supply of goods or services or both.
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Example on rule 35  CGST Rules 2017 value of supply inclusive of tax

Core Formula

Tax Amount = (Value Inclusive of Tax × Tax Rate) ÷ (100 + Tax Rate)

Scenario 1: Intra-State Supply (CGST + SGST)

A shop sells a smartphone for a fixed price of ₹20,000, which explicitly includes GST. The total GST rate for smartphones is 18% (9% CGST + 9% SGST)
  • Value Inclusive of Taxes: ₹20,000
  • Total Tax Rate: 18%

Calculation

  • Total GST Amount: (20,000 × 18) ÷ (100 + 18) = 3,60,000 ÷ 118 = ₹3,050.85
  • CGST Amount (9%): 3,050.85 ÷ 2 = ₹1,525.42
  • SGST Amount (9%): 3,050.85 ÷ 2 = ₹1,525.42
  • Taxable Value (Excluding Tax): 20,000 − 3,050.85 = ₹16,949.15

Scenario 2: Inter-State Supply (IGST)

A manufacturer in Maharashtra sells machinery to a buyer in Karnataka for ₹5,000,000 inclusive of tax. The IGST rate applicable is 28%.
  • Value Inclusive of Taxes: ₹5,000,000
  • Tax Rate: 28%

Calculation

  • IGST Amount: (5,000,000 × 28) ÷ (100 + 28) = 140,000,000 ÷ 128 = ₹1,093,750
  • Taxable Value (Excluding Tax): 5,000,000 − 1,093,750 = ₹3,906,250

Key Takeaways for Explanation (a) & (b)

  • Open Market Value: The ₹16,949.15 in Scenario 1 is the true value before taxes, assuming independent parties and money as the sole consideration.
  • Like Kind and Quality: If the same smartphone is bartered instead of sold for cash, you must find a closely resembling phone in the market to determine this baseline ₹20,000 valuation.

 Rule 35 CGST Rules 2017

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