When Value is not ascertainable

Value of taxable service shall be gross amount charged for similar service if

Such service is in ordinary course of business

And

Gross amount charged is sole consideration

 

Value of similar service cannot be ascertained

In this case, service provider shall determine the equivalent value of such consideration.

However, this value cannot be less than cost of provision of such service

 

Exam Questions

Question 2
Rohit, an advocate, rendered professional advice to its client XY Ltd. on the matters relating to
tax optimization. As a consideration for the said services, XY Ltd. gave a souvenier to Rohit.
The said souvenier was an artifact especially designed and made by the craftsmen as per the
specifications suggested by XY Ltd.
Rohit contends that he need not pay service tax on the services provided by him as value of
thereof could not be ascertained. Is Rohit’s contention correct? Critically examine the case.
Assume that Rohit is not entitled to the exemption available to small service providers.

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

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides GST Training in Delhi. Register now.