Service Tax
Valuation of Taxable Service

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?

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.