(1) Notwithstanding anything contained in the provisions ofthis Chapter, the value in respect of supplies specified below shall, at the option of the supplier, be determined in the manner provided hereinafter.
(2) The value of supply of services in relation to the purchase or sale of foreign currency, including money changing, shall be determined by the supplier of services in the following manner, namely:—
(a) for a currency, when exchanged from, or to, Indian Rupees, 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 ofIndia reference rate for that currency at that time, multiplied by the total units ofcurrency:
Provided that in case where the Reserve Bank ofIndia reference rate for a currency is not available, the value shall be one per cent. of the gross amount of Indian Rupees provided or received by the person changing the money:
Provided further that in case where neither of the currencies exchanged is Indian Rupees, the value shall be equal to one per cent. of the lesser of the two amounts the person changing the money would have received by converting any of the two currencies into Indian Rupee on that day at the reference rate provided by the Reserve Bank of India.
Provided also that a person supplying the services may exercise the option to ascertain the value in terms of clause (b) for a financial year and such option shall not be withdrawn during the remaining part ofthat financial year.
(b) at the option of the supplier of services, the value in relation to the supply of foreign currency, including money changing, shall be deemed to be—
(i) one per cent. ofthe gross amount of currency exchanged for an amount up to one lakh rupees, subject to a minimum amount of two hundred and fifty rupees;
(ii) one thousand rupees and half of a per cent. of the gross amount of currency exchanged for an amount exceeding one lakh rupees and up to ten lakh rupees, and
(iii) five thousand and five hundred rupees and one tenth of a per cent. ofthe gross amount of currency exchanged for an amount exceeding ten lakh rupees, subject to a maximum amount of sixty thousand rupees.
(3) The value of the supply of services in relation to booking of tickets for travel by air provided by an air travel agent shall be deemed to be an amount calculated at the rate of five per cent. ofthe basic fare in the case of domestic bookings, and at the rate often per cent. of the basic fare in the case ofinternational bookings of passage for travel by air.
Explanation.— For the purposes of this sub-rule, the expression “basic fare” means that part ofthe air fare on which commission is normally paid to the air travel agent by the airlines.
(4) The value ofsupply of services in relation to life insurance business shall be,—
(a) the gross premium charged from a policy holder reduced by the amount allocated for investment, or savings on behalf ofthe policy holder, if such an amount is intimated to the policy holder at the time of supply of service;
(b) in case of single premium annuity policies other than (a), ten per cent. ofsingle premium charged from the policy holder; or
(c) in all other cases, twenty five per cent. of the premium charged from the policy holder in the first year and twelve and a half per cent. of the premium charged from the policy holder in subsequent years:
Provided that nothing contained in this subvrule shall apply where the entire premium paid by the policy holder is only towards the risk cover in life insurance.
(5) Where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of" such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value ofsuch supply is negative, it shall be ignored:
Provided that the purchase value of goods repossessed from a defaulting borrower, who is not registered, for the purpose of recovery ofa loan or debt shall be deemed to be the purchase price of such goods by the defaulting borrower reduced by five percentage points for every quarter or part thereof, between the date of purchase and the date of disposal by the person making such repossession.
(6) The value ofa token, or a voucher, or a coupon, or a stamp (other than postage stamp) which is redeemable against a supply of" goods or services or both shall be equal to the money value of the goods or services or both redeemable against such token, voucher, coupon, or stamp.
(7) The value of" taxable services provided by such class of service providers as may be notified by the Government, on the recommendations of the Council, as referred to in paragraph 2 of Schedule I ofthe said Act between distinct persons as referred to in section 25, where input tax credit is available, shall be deemed to be NIL.
33. Value of supply of services in case of pure agent: Notwithstanding anything contained in the provisions ofthis Chapter, the expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied, namely,—
(i) the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorisation by such recipient;
(ii) the payment made by the pure agent on behalf ofthe recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and
(iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account.
Explanation.- For the purposes of this rule, the expression “pure agent” means a person who—
(a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both;
(b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent ofthe recipient of supply;
(c) does not use for his own interest such goods or services so procured; and
(d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account.
Illustration.- Corporate services firm A is engaged to handle the legal work pertaining to the incorporation of Company B. Other than its service fees, A also recovers from B, registration fee and approval fee for the name of the company paid to the Registrar of Companies .The fees charged by the Registrar of Companies for the registration and approval ofthe name are compulsorily levied on B1 A is merely acting as a pure agent in the payment of those fees‘ Therefore, A’s recovery of such expenses is a disbursement and not part ofthe value ofsupply made by A to B.
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