1. Value of supply of goods or services where the consideration is not wholly in money:-
Where the Value of supply of goods or services where the consideration is not wholly in money, the value of supply shall be;
a) The open market value (OMV) of such supply.
b) If OMV is not available, the sum of total consideration in money and such further amount in money that is equivalent to consideration not in money ,if such amount is known at the time of supply.
c) If value is not determinable as above (a&b) then value of like kind and quality.
d) If value is not determinable as above(a, b & c ) then sum total consideration in money and such further amount in money that is equivalent to consideration not in money as determined by rule 4& 5 in that order.
2. Value of supply of goods or services or both between distinct or related person, (other than through an agent) :-
a) The open market value (OMV) of such supply.
b) If OMV is not available, then value of like kind and quality.
c) If value is not determinable as above (a & b ) then the value as determined by rule 4& 5 in that order.
(Where the recipient is eligible for full input tax credit, the value declared in the invoice shall be the OMV).
3. Value of supply of goods made or received (through an agent ):-
The value of supply of goods between the principal and his agent shall be;
a) The OMV of the goods being supplied.
b) Or at the option of the supplier, 90% of the price charged for the supply of like kind and quality by the recipient (intended for further supply) to his customer not being related.
c) If value is not determinable as above (a & b) then the value as determined by rule 4& 5 in that order.
4. Value of supply of goods or services or both based on cost:-
Where the value of the goods or services is not determinable by any preceding rules, the value shall be 110% of the cost of production or manufacture or cost of provision of such services.
5. Residual method for determination of value of supply of goods or services or both:-
Where the value of supply of goods or services or both cannot be determined under rule 1 to 4 the same shall be determined by using reasonable means consistent with the principle and general provision of section 15 and its rules,( in case of services, the supplier may opt for this rule).
6. Determination of value in respect of certain supplies:-
| Sl No. | Particulars | Valuation procedure: |
| 1 | Purchase or sale of foreign currency including money changing | A.
a) (Diff. between buying and selling rate( as per RBI)) X Total unit of currency. b) If RBI rate is not available for the currency then 1% of the gross amount received in INR. c) If neither of the currency is INR, the value shall be 1% lesser of the two amounts by converting any of the two currencies in to INR as per RBI rate on the reference date. B. At the option of the supplier of services(once exercised shall not be withdrawn for the year) ; a) 1% of the gross amount of currency exchanged or min. 250/- (Up to INR 1 Lakh). b) 1000 + 0.5% of the gross amount of currency exchanged (1 lakh > 10 lakhs). c) 5000+ .10% of the gross amount of currency exchanged (more than 10 lakhs), subject to max. INR 60,000/-. |
| 2 | Booking of air tickets(travel agent) | 5% of the basic fare in case domestic bookings.
10% of the basic fare in case of international bookings. (basic fare means on which commission is normally paid to agent) |
| 3. | Life insurance business | a) Gross premium charged – allocated for investment or savings ( if such amount is intimated to the policy holder at the time of supply of services).
b) 10% of single premium (annuity) charged. c) In all other cases; 25% of the premium (for first year), 12.5% of the premium charged in subsequent years. (Nothing of the above rule applicable if the entire premium is towards risk cover in life insurance). |
| 4. | Second hand goods( no input claimed) | Difference between the selling and purchase price (ignored if negative). |
| 5. | Value of token, voucher, coupon or stamp(other than postage) which is redeemable against a supply of goods and services or both | Equal to money value of the goods or services or both. |
| 6. | where taxable services (as notified by govt. on recommendation of the Council.) as refereed in Entry 2 of Schedule I between distinct person (U/s 25), other than those where input is not available U/s 17(5) | Nil. |
7. Value of supply of services in case of Pure Agent:-
The cost or expenditure incurred by the suppliers as a pure agent of the recipient of supply of services shall be excluded for the value of supply if the following condition satisfied:-
a) Act as a pure agent (Contract between third parties and recipient of supply).
b) The recipient of the supply is liable to make payment to third party.
c) The recipient of the supply authorizes the supplier to make payment to third party on his behalf.
d) The recipient of the supply knows that the service for which payment has been made by the supplier shall be provided by the third party.
e) The payment made by the supplier on behalf of the recipient of supply has been separately indicated in the invoice issued to the recipient.
f) The supplier recovers from the recipient of supply only such amount as has been paid by him to the third party.
g) The services procured by the supplier from the third party as a pure agent are in addition to the supply he provides on his own account.
Pure agent means a person who-
- Enters into contractual agreement with the recipient of supply to act as pure agent to incur expenditure or cost in course of supply of goods or services or both.
- Neither intends to hold any title of the goods or services or both procured or provided as pure agent of the recipient of the supply.
- Does not use for his own interest such goods or services so procured.
- Receives only actual amount incurred to procure such goods or services.
8. Rate of exchange of currency, other than INR for determination of value:- The reference rate for that currency as determined by RBI on the date when point of taxation arises in respect of such supply in terms of Sec-12/13.
Explanation:-
(Open market value (OMV)- the full value in money, excluding the integrated tax, central tax, state tax , Union territory tax as the cess payable by a person in a transaction, where the supplier and the recipient are not related and the price is the sole consideration to obtain such supply at the same time when the supply being valued is made.)
(Supply of goods or services or both of like kind and quality means any other supply of goods or services or both under similar circumstances that, in respect of the quality, characteristics, quantity, functional components, materials and reputation of the goods or services or both first mentioned, is the same as or closely or substantially resembles, that supply of goods or service or both.)
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