A historical four-page circular
Published 28 July 2003, the circular explains the amendment enacted 23 December 2002 to Third Schedule paragraph 8 of the GST Act. It covers business goods transferred/disposed of for no consideration and goods remaining immediately before GST deregistration. Goods include stock, non-residential property and business fixed assets.
Why original cost was changed
Before the amendment, the value was the supplier’s cost, usually original cost, effectively clawing back input tax for used assets. This did not align with section 17(3) open-market valuation for supplies without money consideration. A 1994 administrative practice already valued used goods according to the price of buying them at disposal, considering age and condition; the amendment enacted that approach.
The three-step valuation hierarchy
First use the purchase price of identical goods at transfer, disposal or deregistration, considering age and condition: open market value under paragraph 8(2)(a). If unavailable, use similar goods of the same age and condition under 8(2)(b). If that is unavailable too, use the cost of producing the goods at that time under 8(2)(c). These are sequential alternatives, not a free choice of the lowest amount.
GST-exclusive value and output tax
The purchase-price measure excludes GST under paragraph 8(3). Account for output tax on the resulting value. The circular prints no example amounts or universal GST rate and predates later legislation; it should be read as an explanation of this historical valuation amendment. Its helpline is a historical contact, not a current contact verification.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗