Valuation services for its business premises
This query is : Resolved
19 January 2024
Dear Experts,
1 A company is availing the valuation services for its business premises from a registered Chartered Engineer
2 What would be the GST implications on its service
3 The service provider does not registered under GST
1 A company is availing the valuation services for its business premises from a registered Chartered Engineer
2 What would be the GST implications on its service
3 The service provider does not registered under GST
19 January 2024
GST not applicable for the said service...
Message likes :
1 times
19 January 2024
Please put (.) pull stop in closed sentences...
Message likes :
1 times
17 August 2025
1. Core Valuation Approaches
a) Market Approach (Sales Comparison)
Values the property by comparing it to recent sales of similar premises in the area—adjusting for factors like location, size, age, facilities, etc.
Ideal when reliable recent market data is available.
Wikipedia
+1
b) Income Approach (Capitalisation / Discounted Cash Flow)
Calculates value based on the income the property generates.
Methods include:
Direct Capitalisation: Value = Net Operating Income ÷ Capitalisation Rate.
Discounted Cash Flow (DCF): Projects future rent streams and discounts them to present value.
Especially suitable for income-generating commercial premises.
Wikipedia
+1
c) Cost Approach (Replacement Cost)
Values property based on land value plus construction cost minus depreciation (physical, functional, or economic).
Most reliable for newer or special-use properties where market data is limited.
Investopedia
Wikipedia
+1
2. Choosing the Right Approach
Combine methods where helpful: e.g., for older premises, a weighted blend of market and income approaches may yield the most accurate reflection.
Preference depends on context:
Market approach: Best if similar properties are recently transacted.
Income approach: Use when the premise generates rental income.
Cost approach: Use for new constructions or unique custom properties lacking comparables.
Supported by ICAI Valuation Standard 103, these three approaches are the recognized foundation for robust and consistent valuation outcomes.
BCAJ
3. Regulatory & Reporting Standards
Engage a Registered Valuer under the Companies Act when valuation is for legal compliance or financial reporting.
Financial valuation (e.g., shares, goodwill) requires a CA, CMA, or CS with 5 years’ experience.
Technical valuation (e.g., immovable property) requires a licensed engineer or architect.
CAclubindia
Ensure the engagement letter and valuation report align with ICAI or International Valuation Standards (IVS)—defining scope, bases of value, assumptions, and methods used.
a) Market Approach (Sales Comparison)
Values the property by comparing it to recent sales of similar premises in the area—adjusting for factors like location, size, age, facilities, etc.
Ideal when reliable recent market data is available.
Wikipedia
+1
b) Income Approach (Capitalisation / Discounted Cash Flow)
Calculates value based on the income the property generates.
Methods include:
Direct Capitalisation: Value = Net Operating Income ÷ Capitalisation Rate.
Discounted Cash Flow (DCF): Projects future rent streams and discounts them to present value.
Especially suitable for income-generating commercial premises.
Wikipedia
+1
c) Cost Approach (Replacement Cost)
Values property based on land value plus construction cost minus depreciation (physical, functional, or economic).
Most reliable for newer or special-use properties where market data is limited.
Investopedia
Wikipedia
+1
2. Choosing the Right Approach
Combine methods where helpful: e.g., for older premises, a weighted blend of market and income approaches may yield the most accurate reflection.
Preference depends on context:
Market approach: Best if similar properties are recently transacted.
Income approach: Use when the premise generates rental income.
Cost approach: Use for new constructions or unique custom properties lacking comparables.
Supported by ICAI Valuation Standard 103, these three approaches are the recognized foundation for robust and consistent valuation outcomes.
BCAJ
3. Regulatory & Reporting Standards
Engage a Registered Valuer under the Companies Act when valuation is for legal compliance or financial reporting.
Financial valuation (e.g., shares, goodwill) requires a CA, CMA, or CS with 5 years’ experience.
Technical valuation (e.g., immovable property) requires a licensed engineer or architect.
CAclubindia
Ensure the engagement letter and valuation report align with ICAI or International Valuation Standards (IVS)—defining scope, bases of value, assumptions, and methods used.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- ITR 3 VALIDATION
- Brokage income from sale and purchase of property
- 44AD business and F&O loss
- Regarding Withdrawal of unused amount in Capital Gain account scheme
- Purchase of Time Deposit in AIS
- UNUTILISED CAPITAL GAIN FD
- Correction in filed Form 27Q - showing error due to deductee contact number
- LTCG EXEMPTION AND TAX APPLICABILITY
- ITR-4- U/s.44AD- Financial Particulars of Business
- Error while validating
- Category of defect A error
- Income Tax Slab - Marginal relief for surcharge
- Clarification on temporary surplus parking by co-operative banks in mutual funds
- PRESUMPTIVE INCOME & FUTURE AND OPTION INCOME
- IT RETURNS FILING FY 2024-25
- E way Bill in two transits covered_Supplier to ist cistumer and ist customer to end customer
- VDA virtual Digital currency or cryptocurrency.
- Accounting entry for instalment payments and gst obigations
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Composition Dealer GST Annual Return Filing process
Trending Online Classes
-
Input Tax Credit, GST refunds and Recovery of refunds- Roadblocks and way outs
CA Nipun Arora03 September 2025 -
GST LIVE Certification Course - 43rd Weekdays Batch(With Govt Certificate)
Industry Expert15 September 2025
CAclubindia
