Rules 32 and 32A 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.
Rule 32 collects the special valuation methods for seven kinds of supply, from foreign currency and air travel to second-hand goods, vouchers and services between distinct persons. Sub-rule (1) makes the methods an option of the supplier. Rule 32A states that the Kerala Flood Cess is left out of the value of the supply.
This article follows the Central Goods and Services Tax Rules, 2017 as amended up to 31 October 2025 in the compilation consulted; notifications issued after that date should be checked.
Rule 32(1) says the value of the supplies it lists is determined "at the option of the supplier" in the manner provided in the rule. Sub-rule (6) values a token, voucher, coupon or stamp (other than a postage stamp) redeemable against a supply at the money value of the goods or services redeemable. Sub-rule (7) makes the value of notified services between distinct persons, where input tax credit is available, NIL. Sub-rules (2) to (5) have their own posts. Rule 32A excludes the Kerala Flood Cess.
The section behind the rule
Rule 32 applies "notwithstanding anything contained in the provisions of this Chapter", that is, notwithstanding rules 27 to 31. It sits under section 15 of the CGST Act, 2017: see section 15 of the CGST Act, 2017. If your business supplies any of the items below, our GST health check can test the way you value them.
Sub-rule (1): the supplier's option
"Notwithstanding anything contained in the provisions of this Chapter, the value in respect of supplies specified below shall, at the option of the supplier, be determined in the manner provided hereinafter."
Two things follow. The listed methods displace the general rules in the Chapter, and the supplier may choose them. Where the supplier does not exercise the option, the general rules of the Chapter remain. The rule does not state how or when the option is exercised, beyond the proviso in sub-rule (2)(a) for foreign currency, which fixes the option for a financial year.
Sub-rules (2) to (5): the supplies with their own posts
Each of these four sub-rules has a post on this site. This article gives each a short paragraph and the link.
- Sub-rule (2): purchase or sale of foreign currency, including money changing. Clause (a) values the service by the difference between the buying or selling rate and the Reserve Bank of India reference rate, multiplied by the units of currency, with two provisos for cases where the reference rate is not available or neither currency is Indian Rupees; clause (b) is an alternative value in bands with a minimum and a maximum amount in rupees. See rule 32(2): valuing foreign exchange and money changing.
- Sub-rule (3): air travel agent. The value of the service of booking tickets for travel by air is deemed to be a percentage of the basic fare: five per cent. for domestic bookings and ten per cent. for international bookings, with an Explanation defining "basic fare". See rule 32(3): air travel agent valuation on basic fare.
- Sub-rule (4): life insurance business. The value is the gross premium less the amount allocated for investment or savings, if intimated to the policy holder at the time of supply (clause (a)); ten per cent. of single premium for single premium annuity policies (clause (b)); and otherwise twenty five per cent. of the first year's premium and twelve and a half per cent. of premium in subsequent years (clause (c)), with a proviso where the entire premium is only for risk cover. See rule 32(4): valuing life insurance business.
- Sub-rule (5): second-hand goods. For a person dealing in buying and selling second hand goods where no input tax credit has been availed on the purchase, the value is the difference between selling price and purchase price, and a negative value is ignored; a proviso covers goods repossessed from a defaulting borrower. See the margin scheme for second-hand goods under rule 32(5).
Sub-rule (6): tokens, vouchers, coupons and stamps
"The value of a token, or a voucher, or a coupon, or a stamp (other than postage stamp) which is redeemable against a supply of goods or services or both shall be equal to the money value of the goods or services or both redeemable against such token, voucher, coupon, or stamp."
- What is valued. The token, voucher, coupon or stamp itself, when it is supplied.
- The measure. The money value of the goods or services redeemable against it.
- The exclusion. A postage stamp is outside the sub-rule.
The sub-rule gives a single measure and no deduction. It does not say what happens to the value when the voucher is later redeemed; read the time-of-supply provisions of the Act for that.
Sub-rule (7): services between distinct persons
"The value of taxable services provided by such class of service providers as may be notified by the Government, on the recommendations of the Council, as referred to in paragraph 2 of Schedule I of the said Act between distinct persons as referred to in section 25, where input tax credit is available, shall be deemed to be NIL."
Taking the pieces:
- Class of service providers. "As may be notified by the Government, on the recommendations of the Council". The notification is not in the sources consulted; check it before relying on this sub-rule.
- Which services. Those referred to in paragraph 2 of Schedule I of the Act, supplies between distinct persons as referred to in section 25. See Schedule I: activities treated as supply without consideration.
- Condition. Input tax credit is available.
- Result. The value is deemed to be NIL.
Rule 32A: Kerala Flood Cess
"The value of supply of goods or services or both on which Kerala Flood Cess is levied under clause 14 of the Kerala Finance Bill, 2019 shall be deemed to be the value determined in terms of section 15 of the Act, but shall not include the said cess."
Read in two parts: the value is the section 15 value, and the cess is not part of it. The rule refers to a State Finance Bill of 2019, a law outside the GST statutes; check the current law for the corresponding provision before relying on the rule. The footnote records that rule 32A was inserted by Notification No. 31/2019 - CT dated 28.06.2019, with effect from 01.07.2019.
Who does what
| Sub-rule | Supply | Who decides | The value |
|---|---|---|---|
| (1) | All listed supplies | Supplier, by option | As provided in the sub-rule that applies |
| (2) | Foreign currency, including money changing | Supplier of services | Per clauses (a) and (b) |
| (3) | Air travel agent booking | Air travel agent | Percentage of basic fare |
| (4) | Life insurance business | Supplier | Per clauses (a) to (c) |
| (5) | Second-hand goods | Dealer | Selling price less purchase price; negative ignored |
| (6) | Token, voucher, coupon or stamp (not postage stamp) | Supplier | Money value of goods or services redeemable |
| (7) | Notified services between distinct persons, input tax credit available | Government class by notification | NIL |
| 32A | Supplies carrying the Kerala Flood Cess | Supplier | Section 15 value, excluding the cess |
A worked example
Ganga Gift Cards Private Limited, an invented company, issues vouchers that can be redeemed against goods supplied by its group stores. A voucher is redeemable against goods whose money value, printed on it, is five hundred rupees. Under rule 32(6), the value of the supply of the voucher is the money value of the goods redeemable against it, five hundred rupees. If the company sold postage stamps in the same way, those would sit outside sub-rule (6).
A second case: Northline Services, an invented company belonging to a class notified under rule 32(7), provides taxable services to its own distinct-person branch. Because input tax credit is available to the branch, the value of those services is deemed to be NIL; if the notified class does not include Northline, sub-rule (7) does not help it.
Points to watch
- It is an option. Rule 32(1) leaves the choice to the supplier, within the limits of each sub-rule.
- Postage stamps. Excluded from sub-rule (6) by the bracketed words.
- Notification for sub-rule (7). The notified class is not in the sources consulted.
- Cross-law reference. Rule 32A names a State Finance Bill; check the current law.
- Schedule I. Sub-rule (7) works by reference to paragraph 2 of Schedule I and section 25 of the Act.
Need help choosing a valuation method?
A supplier who can choose the method should choose it knowingly, and for a recurring supply the choice has to be consistent. We review the supplies you make against rules 27 to 32A and the notification-based classes, and set out the valuation in writing. See our GST health check.
Key takeaways
- Rule 32(1): the listed methods apply at the option of the supplier, notwithstanding the rest of the Chapter.
- Rule 32(2) to (5): foreign currency, air travel agent, life insurance and second-hand goods; each has its own post.
- Rule 32(6): a token, voucher, coupon or stamp (other than postage stamp) is valued at the money value of the goods or services redeemable.
- Rule 32(7): notified services between distinct persons, where input tax credit is available, have a deemed value of NIL.
- Rule 32A: the Kerala Flood Cess is excluded from the value determined under section 15.
Read next
- Rules 31B and 31C of the CGST Rules, 2017: online gaming and casinos
- Rule 38 of the CGST Rules, 2017: claim of credit by a banking company or financial institution
- Pure agent under rule 33: reimbursement excluded from value
- Rule 34: which exchange rate applies, and when
Disclaimer: Based on the Central Goods and Services Tax Rules, 2017 and the GST Acts as amended up to 31 October 2025 in the compilation consulted, read with the Finance Act, 2026 where this article says so, as consulted on 2 October 2026. Notifications, circulars and amendments issued after that date, the forms on the common portal and the way the tax authorities apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.