Applicability of valuation of CHA service @ 15% in respect of a turnkey contract

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Whether valuation of CHA service @ 15% in respect of a turnkey contract of import where lumpsum is charged (trade notice 5/97) is still applicable even after new Valuation of service rules have been notified in 2006

AI Summary

Debate on Valuing CHA Services at 15% for Turnkey Imports Amid New 2006 Service Valuation Rules A query was raised regarding the applicability of valuing Customs House Agent (CHA) services at 15% for a turnkey import contract, as per a 1997 trade notice, in light of new service valuation rules introduced in 2006. The respondent indicated that despite changes in the law, technically, service tax should be paid on the full value of the service. However, the trade notice might still offer some relief, though there is a potential risk of future litigation.