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Service Tax
Valuation of Taxable Service

Section 67 Of Finance Act

As per this Section,

If consideration received in money

Value of taxable service is Gross Amount Charged

(i.e.In simple language, Service tax is charged on gross amount charged from customer for the service)



This amount may be paid to service provider or any other person on behalf of service provider

This may be paid at anytime (before,during or after) providing the service, 

What is Gross Amount Charged

Gross Amount Charged means

Payment  by cash, cheque, deduction from account/any payment by way of debit note/credit note and book adjustment.

In case of associated enterprises, It also includes any amount debited or credited in suspense account or any other account in books of person liable to pay service tax


When Gross Amount is inclusive of Service tax

Value shall be amount in addition to service tax as equal to gross amount charged

Value + Service tax =Gross Amount charged

Value=Gross Amount charged-Service tax



If consideration received partly in cash and partly in kind

Such amount in addition to service tax as equal to consideration

Value + Service tax =Total Consideration


Value + Service tax = Consideration in cash + Consideration in kind

Value = Consideration in cash + Consideration in kind-Service tax



If Consideration is not ascertainable (cannot be determined)

Where for the provision of service, the consideration is not ascertainable

Amount shall be, as may be determined for in prescribed manner

(as per Service tax (Determination of Value ) Rules,2006)

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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.