Valuation of taxable services for charging service tax [section 67 read with service tax (determination of value ) Rules ,2006 ]:

• Where the gross amount charged for provision of service is inclusive of service tax :

Service tax payable = Gross Amount Charged X 14/114

 

• (i) Where the provision of service is for a consideration in money –Gross amount charged by the service provider for such service e.g.
• Where the provision of service is for a consideration not wholly or partly consisting of money – Such amount in money as , with the addition of service tax charged ,is equivalent to the consideration.
• Where the provision for service is for a consideration which is not ascertainable- The amount as may be determined in the manner prescribed by  service tax (determination of value ) Rules ,2006

Rule 3 states as under in case of consideration not ascertainable for a service-

• Value is equal to the gross amount charged to provide similar service to any other person in the ordinary course of trade and the gross amount charged is the sole consideration.
• Value cannot be less than the cost of provision of service where the value cannot be determined as above. Cost worked out on basis of usual costing principles of normal costs and allocation of normal overheads.