GSTR-9C Table 5M: Valuation Adjustments Under Section 15

GSTR explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Section 15 does not simply accept the invoice price. It adds five categories of amount to it, and each addition produces a figure the accounts never recorded — most starkly where a customer supplies materials free of charge and the supplier's books show nothing at all.

Table 5M carries "Adjustments in turnover under section 15 and rules thereunder (+/-)" — "There may be cases where the taxable value and the invoice value differ due to valuation principles under section 15 and rules thereunder. Therefore, any difference between the turnover reported in the Annual Return and turnover reported in the audited Annual Financial Statement due to difference in valuation of supplies shall be declared here." It was optional for FY 2017-18 to FY 2021-22, reportable in Table 5O.

When transaction value applies at all

"It provides that the transaction value (value at which the supply has been transacted) would be the basis for the computation of tax when two conditions are satisfied —"

• "The price actually paid or payable should be the sole consideration for the supply; and"
• "The supplier and the recipient are not related."

"Even if the price for a supply is agreed to be the transaction value, few adjustments (provided for under section 15 itself) are required to be carried out to such price."

The five inclusions, and what each does to the accounts

1. Non-GST taxes, duties, cesses and fees charged separately. "This provision provides for the exclusion of GST from the value and, therefore, all other taxes charged must be included in the value before quantifying GST. Taxes other than the GST would cause cascading and this is deliberate."

The Guide's example: in an industrial park, the maintenance company generates back-up power and pays CEIG tax to the local Electricity Board. "Treatment in Books — CEIG tax is debited to the expense account and recoveries are credited to the same account. Treatment under GST — CEIG tax is required to be added to the maintenance income for computation of the GST."

A recovery netted against an expense produces no revenue in the accounts and taxable turnover in GST. That is the shape of most 5M adjustments.

2. Amounts the supplier is liable to pay but the recipient incurs. "This provision requires computation of values that are directly paid by the recipient although the supplier is required to incur such costs — typically, Free of Cost Supplies."

The construction example: a contractor responsible for procuring all materials, where "the developer issues cement free of cost to this contractor."

The contractor adds turnover for which there is no ledger entry at all — which is why free-issue material is a standing 5M item in construction and EPC.

3. Incidental expenses, including commission and packing. "Costs that the supplier incurs 'at' the time of or 'before' supply is liable to be included in the value."

Example: supply of water by a maintenance company to an industrial park, where the tanker cost "is debited to expense account and the amount recovered… is credited to such expense account" while "Such recovery is required to be included in the value of supply."

4. Interest, late fee or penalty for delayed payment. "Amounts charged for delay in the remittance of consideration would be considered as value of supply and tax payable on the same, though it could be argued that these are not supplies but financial transactions." And "These charges are generally recorded as other incomes and may not require any reconciliation."

5. Subsidies directly linked to the price, excluding Government subsidies. "Subsidy is any form of 'intervention' that lowers the transacted-price of a supply. Also, 'grant-with-condition' can be consideration for supply", and "any transaction where there is any form of price-intervention that behaves like a 'subsidy' is liable to be included."

Example: "E-Commerce operator compensating vendors who participate in their shopping festival sales by offering additional discounts… in the form of reduction in the regular sales by the ecommerce operator through the issuance of a financial credit note."

Note the reach of that example. A platform's own discount funding, routed as a commercial credit note, is a third-party price-linked subsidy and adds to the vendor's taxable value. Platform-funded against supplier-funded discounts →

The valuation rules, and the five alternate values

"valuation rules also provide instances where the value of a transaction as per the financial records can be significantly different from the value to be considered for discharge of taxes."

Five alternate bases the Guide lists:

• Open market value;
• Value of supply of goods/services of like kind and quality;
• Cost + 10%;
• "In case of sale to a related party which further sells the same product at 90% of the resale price";
• "Any price, so long as the related party/distinct person can avail credit of the same."

These are rule 28's hierarchy and its two provisos — and the last is the one that usually applies. Rule 28 valuation →

Two special mechanisms:

Rule 32 deemed values. "an Air Travel Agent is required to discharge GST on 5% of the basic fare at the rate of 18% in case of domestic bookings instead of the commission actually earned. The commission earned can be more/less same than the deemed value assigned to the transaction, thereby requiring reconciliation of sales values."

Rule 33 pure agent. "allows for non-inclusion of cost/expenses incurred by the supplier on behalf of the recipient… It should be ensured that all the conditions of pure agency are satisfied by the supplier who claims benefit for non-charging of GST on such charges."

The documents to gather

The Guide's list for this Table:

• Vendor contracts — "Any free supplies by a recipient which was the responsibility of supplier would be required to be added to the turnover of supplier";
• Reasons for credit notes, with "corroborative evidence in case the values are high";
• Outward supply invoices;
• Customer ledger statements, to identify debits and credits and their reasons;
• Contracts for pure agency;
• List of related parties and details of transactions with them.

Key takeaways

• Table 5M carries the gap between invoice value and taxable value created by section 15 and the valuation rules.
• Transaction value applies only where price is the sole consideration and the parties are unrelated.
• Non-GST taxes charged separately are added — cascading is deliberate.
• Free-of-cost supplies by the recipient are added to the supplier's turnover even though his books record nothing.
• Recoveries netted against expense accounts produce turnover in GST and no revenue in the accounts.
• Delayed-payment interest and penalties are included in value.
• Price-linked subsidies from anyone but the Government are included — including platform-funded festival discounts issued as financial credit notes.
• Alternate values: OMV, like kind and quality, cost + 10%, 90% of resale price, and any value where the recipient has full credit.
• Rule 32 deemed values (air travel agents at 5% of basic fare) and rule 33 pure agency both create reconciling differences.

Read next

• GSTR-9C Table 5N: Foreign Exchange Fluctuation
• GSTR-9C Table 5D: Deemed Supply Under Schedule I
• Rule 28 Valuation: The 90% Rule and the "Any Value" Proviso

Disclaimer: Positions stated as on 5 September 2026, based on Form GSTR-9C and its instructions, sections 9 and 15 of the CGST Act, 2017 and rules 27 to 35 of the CGST Rules, 2017, as reproduced in the ICAI Technical Guide on GST Reconciliation Statement (Form GSTR-9C).