R.1 Short title and commencement.-

       (1) These rules may be called the Service Tax (Determination of Value) Rules, 2006.
       (2) They shall come into force on the date of their publication in the Official Gazette.

R.2 Definitions.-

       In these rules, unless the context otherwise requires,
       I. Act means the Finance Act, 1994 (32 of 1994);
       II. section means the section of the Act;
       III. value shall have the meaning assigned to it in section 67;
       IV. words and expressions used in these rules and not defined but defined in the Act shall have the meaning respectively assigned to them in the Act.

R.2(a) 2[2A. Determination of value of services involved in the execution of a works contract.--

       (1) Subject to the provisions of section 67, the value of taxable service in relation to services involved in the execution of a works contract (hereinafter referred to as works contract service), referred to in sub-clause (zzzza) of clause (105) of section 65 of the Act, shall be determined by the service provider in the following manner:-
       (i) Value of works contract service determined shall be equivalent to the gross amount charged for the works contract less the value of transfer of property in goods involved in the execution of the said works contract.
       Explanation.- For the purposes of this rule,-
       (a) gross amount charged for the works contract shall not include Value Added Tax (VAT) or sales tax, as the case may be, paid, if any, on transfer of property in goods involved in the executi

R.2(B) 4[2B. Determination of value of service in relation to money changing.--

       Subject to the provisions of section 67, the value of taxable service provided for the services referred to in sub-clause (zm) and (zzk) of clause (105) of section 65 of the Act, so far as it pertains to purchase or sale of foreign currency, including money changing, shall be determined by the service provider in the following manner:-
       For a currency, when exchanged from, or to, Indian Rupees (INR), the value shall be equal to the difference in the buying rate or the selling rate, as the case may be, and the Reserve Bank of India (RBI) 6[reference rate for that currency at that time], multiplied by the total units of currency.
       Example I: US$100 are sold by a customer at the rate of Rupees 45 per US$.
       RBI reference rate for US$ is Rupees 45.50 for that day.
     &nbs

R.3 Manner of determination of value.-

       Subject to the provisions of section 67, the value of taxable service, where the consideration received is not wholly or partly consisting of money, shall be determined by the service provider in the following manner:
       (a) 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;
       (b) 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.

R.4 Rejection of value.-

       (1) Nothing contained in rule 3 shall be construed as restricting or calling into question the power of the Central Excise Officer to satisfy himself as to the accuracy of any information furnished or document presented for valuation.
       (2) Where the Central Excise Officer is satisfied that the value so determined by the service provider is not in accordance with the provisions of the Act or these rules, he shall issue a notice to such service provider to show cause why the value of such taxable service for the purpose of charging service tax should not be fixed at the amount specified in the notice.
       (3) The Central Excise Officer shall, after providing reasonable opportunity of being heard, determine the value of such taxable service for the purpose of charging service tax in accordance with the provisions of the Act and these rules.

R.5 Inclusion in or exclusion from value of certain expenditure or costs.-

       (1) Where any expenditure or costs are incurred by the service provider in the course of providing taxable service, all such expenditure or costs shall be treated as consideration for the taxable service provided or to be provided and shall be included in the value for the purpose of charging service tax on the said service.
       5[Explanation.- For the removal of doubts, it is hereby clarified that for the services specified in sub-clause (zzzx) of clause (105) of section 65 of the Finance Act, 1994, the value of the taxable service shall be the gross amount paid by the person to whom telecom service is provided by the telegraph authority.]
       (2) Subject to the provisions of sub-rule (1), the expenditure or costs incurred by the service provider as a pure agent of the recipient of service, shall be excluded from the value of the taxable serv

R.6 Cases in which the commission, costs, etc., will be included or excluded.-

       (1) Subject to the provisions of section 67, the value of the taxable services shall include
       the commission or brokerage charged by a broker on the sale or purchase of securities including the commission or brokerage paid by the stock-broker to any sub-broker;
       I. the adjustments made by the telegraph authority from any deposits made by the subscriber at the time of application for telephone connection or pager or facsimile or telegraph or telex or for leased circuit;
       the amount of premium charged by the insurer from the policy holder;
       II. The commission received by the air travel agent from the airline;
       III. The commission, fee or any other sum received by an actuary, or intermediary or insurance

R.7 Actual consideration to be the value of taxable service provided from outside India.-

       (1) The value of taxable service received under the provisions of section 66A, shall be such amount as is equal to the actual consideration charged for the services provided or to be provided.
       (2) Notwithstanding anything contained in sub-rule (1), the value of taxable services specified in clause (ii) of rule 3 of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, as are partly performed in India, shall be the total consideration paid by the recipient for such services including the value of service partly performed outside India.