Value of Similar Services or Identical Services - Where value is not known or not ascertainable - Service Tax Practice Manual / Ready Reckoner - Service Tax

Value of Similar Services or Identical Services Where value is not known or not ascertainable Valuation Rules - Value of Similar Services - Rule 3(a) Rule 3(a) of Service Tax (Determination of Value) Rules, 2006 is applicable where: - - the additional consideration is received other than money - value of such consideration is not ascertainable - value of similar service is available In such case the value of such taxable service shall be equivalent to the gross amount charged by the service provider to provide similar service to any other person in the ordinary course of trade and the gross amount charged is the sole consideration. The meaning of word similar has been defied by the honorable Supreme Court in Nat Steel Equipment Pvt. Ltd. v. CCE [ 1988 (1) TMI 38 - SUPREME COURT OF INDIA] as .the expression similar is a significant expression. It does not mean identical but it means corresponding to or resembling to in many respects; somewhat like; or having a general likeness. The statute does not contemplate that goods classed under the words of 'similar description' shall be in all respects the same. If it did these words would be unnecessary. These were intended to embrace goods but not identical with those goods . ============== Valuation Rules - Equivalent Value - Rule 3(b) Rule 3(b) of Service Tax (Determination of Value) Rules, 2006 is applicable where: - - the additional consideration is received other than money - value of such consideration is not ascertainable - value of similar service is not ascertainable under rule 3(a) Accordingly, where the value cannot be determined in accordance with clause (a), the service provider shall determine the equivalent money value of such consideration which shall, in no case be less than the cost of provision of such taxable service. In simple words, the value shall be determined by the asessee himself and such value must not be less that cost of such services. This rule is salient about how to calculate the cost of such service. CAS-4 (Cost Accounting Standard 4) of the ICWAI provides the method and procedure for calculating the cost of manufactured / produced goods. This standard CAS-4 may be applied for the purpose of determination of Cost of Services Provided for the purpose of rule 3(b) . ==============