Valuation in GST: The Valuation under Central Excise law was very much complicated. Section 4 of the Central Excise Act dealt with valuation provisions and it provided that the duty should be paid on the Transaction value provided –
- (a) Price is the sole consideration and
- (b) assessee and the buyer are not related.
Valuation based on Installed capacity –
- Transaction Value – Normally the selling price. Accepted only if the parties are not related and price was the sole consideration.
- Tariff Rate – Instead of value, the duty was payable on UOM viz. Kgs, Meters etc.
- MRP based valuation
- Installed Capacity method.
Valuation in Service tax -In service tax also, the valuation was a complicated issue. As per the provisions of Sec. 67, where the service was provided for a consideration in money, then the service tax was to be charged on the value of such consideration for such service provided or to be provided. Thus, the total consideration received plus equivalent consideration not received in money was subject matter of service tax.
Valuation in GST :Section 15 (1) of the CGST Act deals with Valuation of goods and services. The basic provision is similar to earlier law – i.e. Tax to be paid on the Transaction Value.
- i) Open Market Value of such goods, or
- ii) In absence of Open Market Value, the value equivalent to the consideration not received in money should be added to the Transaction Value, or
- iii) Value of like goods or services, or
- iv) If value cannot be determined by above methods, the same shall be determined as Cost + 10%.