Rate of exchange of currency, other than Indian rupees, for determination of value
The rate of exchange for determination of value of taxable
goods or services or both shall be the applicable RBI reference rate for that
currency on the date of time of supply as determined in terms of section 12 or
section 13 of the CGST Act.
Special provision related to determination of Value of service of
purchase or sale of foreign currency including money changing
Option-1
Case 1: Transaction where one of the currencies exchanged is Indian
Rupees
Taxable value is difference between buying rate or selling rate of
currency and RBI reference rate for that currency at the time of
exchange multiplied by total units of foreign currency. However if RBI
reference rate for a currency is not available then taxable value is 1%
of the gross amount of Indian Rupees provided/received by the person
changing the money.
Case 2:
Transaction where neither of the currencies exchanged is Indian
Rupees
Taxable value will be 1% of the lesser of the two amounts the person
changing the money would have received by converting (at RBI
reference rate) any of the two currencies in Indian Rupees.
Option-2
The person supplying the service may also exercise the following option
to ascertain the taxable value, however, once opted then he cannot
withdraw it during the remaining part of the financial year:
•One percent of the gross amount of currency exchanged for an
amount upto one lakh rupees, subject to minimum amount of
two hundred and fifty rupees.
•One thousand rupees and half of a percent of the gross amount of
currency exchanged for an amount exceeding one lakh
rupees and
up to ten lakh rupees.
• Five thousand rupees and one tenth of a percent of the gross
amount of currency exchanged for an amount exceeding ten lakhs
rupees subject to a maximum amount of sixty thousand
rupees.
Special provision related to determination of value of service of
booking of tickets for air travel by an air travel agent
Taxable value is 5% of basic fare in case of domestic travel and 10% of basic
fare in case of international travel. Basic fare means that part of the air fare
on which commission is normally paid to the air travel agent by the airline.
The expression ‘basic fare’ means that part of the air fare on which
commission is normally paid to the air travel agent by the airlines.
Special provision related to determination of value of service in relation
to life insurance business
Taxable value varies with nature of insurance policy. The details are as
follows:
• Where policy has dual benefits of risk coverage and
investment –
Taxable value is gross premium charged less amount allocated for
investments or savings if such allocation is intimated to the policy
holder at the time of collection of premium.
• Single premium annuity policy where allocation
for investments and savings is not
intimated to the policy holder – taxable value is
ten percent of the single premium charged from the policy holder.
• Other cases- Twenty five percent of premium charged from the
policy holder in the first year and twelve and a half percent of
premium charged for subsequent years.
However, where insurance policy has benefit of risk coverage only,
then taxable value is entire premium charged from the policy holder.
Value of supply inclusive of integrated tax, central tax,
State tax, Union territory tax
Where the value of supply is inclusive of GST, the tax
amount shall be determined in the following manner,
Tax amount= (Value inclusive of taxes X GST tax rate in %)/(
100+ sum of GST tax rates in %)
For example - If the value inclusive of tax is Rs. 100/- and
applicable GST tax rate is 18% then
Tax amount = (100x18)/ (100+18) = 1800/118=Rs. 15.25
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