TAX MATTERS: General value of the supply rule

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THE value of supply refers to the tax base on which Value Added Tax (VAT) rate is to be applied. The rule was introduced by VAT laws, which state that for the purposes of the VAT Act, this section shall apply for determining the value of any supply of goods or services.
The value to be placed on any supply of goods or services shall be the value of the consideration for such supply less so much of such value as represents tax. Value is an amount exclusive of VAT i.e. value is equal to consideration less tax.

The term consideration, however, excludes the value of any postage stamp as defined in the Postal and Telecommunications Act, which is used in the payment of consideration for any service supplied by the successor postal company or any postal licensee. “Consideration ”, in relation to the supply of goods or services to any person, includes any payment made or to be made, including any deposit on any returnable container and tax, whether in money or otherwise, or any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of any goods or services, whether by that person or by any other person, but does not include any payment made by any person as an unconditional gift to any association not for gain: provided that a deposit, other than a deposit on a returnable container, whether refundable or not, given in respect of a supply of goods or services shall not be considered as payment made for the supply unless and until the supplier applies the deposit as consideration for the supply or such deposit is forfeited”.