We know that

Amount * Rate=Tax

Determining such amount on which tax is charged  is called Valuation


This valuation is done in Service tax 

using Section 67 of Finance Act

as read with Service tax (Determination of Value Rules,2006)


Lets study these rules in detail


Exam Questions

Question 1
ABC Architects entered into a contract with BTC Group of Hotels to design the architecture of
one of its hotels at an agreed consideration of Rs. 20 lakh. Out of the total consideration, it
asked BTC Group of Hotels to pay Rs. 12,50,000 to its material supplier-Khanna Manufacturers.
Will the payment of part of consideration by the service receiver to a third party on behalf of
the service provider be included in the value of taxable services?

View Answer
  1. Service Tax
  2. Valuation of Taxable Service
Service Tax
Valuation of Taxable Service

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 11 years. He also provides Accounts Tax GST Training in Delhi and Pune.