How to Determine value of Supply in case of Foreign Currency Exchange, Ticket Booking, , Life Insurance (LIC) under GST

Rule-32 of CGST Rules 2017

32. Deter­mi­na­tion of val­ue in respect of cer­tain supplies.- 

(1) Notwith­stand­ing any­thing con­tained in the pro­vi­sions of this Chap­ter, the val­ue in respect of sup­plies spec­i­fied below shall, at the option of the sup­pli­er, be deter­mined in the man­ner provided

• 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:- 
  • 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 of India ref­er­ence rate for that cur­ren­cy at that time, mul­ti­plied by the total units of currency:

 

Pro­vid­ed that in case where the Reserve Bank of India 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 of that finan­cial year.

• 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- 
  • one per cent. of the gross amount of cur­ren­cy exchanged for an amount up to one lakh rupees, sub­ject to a min­i­mum amount of two hun­dred and fifty rupees;
  • 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
  • five thou­sand and five hun­dred rupees and one tenth of a per cent. of the gross amount of cur­ren­cy exchanged for an amount exceed­ing ten lakh rupees, sub­ject to a max­i­mum amount of six­ty thousand
• 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. of the basic fare in the case of domes­tic book­ings, and at the rate of ten per cent. of the basic fare in the case of inter­na­tion­al book­ings of pas­sage for trav­el by

Expla­na­tion.- For the pur­pos­es of this sub-rule, 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.

• The val­ue of sup­ply of ser­vices in rela­tion to life insur­ance busi­ness shall be,- 
  • the gross pre­mi­um charged from a pol­i­cy hold­er reduced by the amount allo­cat­ed for invest­ment, or sav­ings on behalf of the pol­i­cy hold­er, if such an amount is inti­mat­ed to the pol­i­cy hold­er at the time of sup­ply of service;
  • in case of sin­gle pre­mi­um annu­ity poli­cies oth­er than (a), ten per cent. of sin­gle pre­mi­um charged from the pol­i­cy hold­er; or
  • 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 sub-rule shall apply where the entire pre­mi­um paid by the pol­i­cy hold­er is only towards the risk cov­er in life insurance.

• Where a tax­able sup­ply is pro­vid­ed by a per­son deal­ing in buy­ing and sell­ing of sec­ond hand goods 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 of such 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 of a 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.

• The val­ue of a 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.

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 of the said Act between dis­tinct per­sons as referred to in sec­tion 25, where input tax cred­it is avail­able, shall be deemed to be NIL.