abhishek (Service) (66 Points)
17 November 2011Hi My company is providing AMC Comprehensive contract oh Gym Equipments Machines i need to know the tax structure for comprehensive contracts as per act suppose a contract value is 100000/- so i m charging sales tax 12.5% WCT on 60% and on 40% of contract value service tax @ 10.30% am i correct because as per sales tax 40% deduction is allowed as labour charges but under service tax i m confused can you please guide me on this if possible please give some section or notification.
CA. C V SURYAM
(Practising Chartered Accountant)
(865 Points)
Replied 17 November 2011
As there are no explicit provisions under the FA, 1994 i.r.o AMC contracts, we may take the shelter under N. No.12/2003-ST according to which the value of materials on which VAT/WCT was paid can be excluded from gross amount and balance representing value of service on which service tax can be paid @ 10.3%. The abatement being followed presently by you is as per VAT but not as per ST which will lead to complications. Hence, best recourse is N. No.12/2003-ST.
CA. C V SURYAM
Mob: 9177171123 / 9848180210
CA. C V SURYAM
(Practising Chartered Accountant)
(865 Points)
Replied 17 November 2011
As there are no explicit provisions under the FA, 1994 i.r.o AMC contracts, we may take the shelter under N. No.12/2003-ST according to which the value of materials on which VAT/WCT was paid can be excluded from gross amount and balance representing value of service on which service tax can be paid @ 10.3%. The abatement being followed presently by you is as per VAT but not as per ST which will lead to complications. Hence, best recourse is N. No.12/2003-ST.
CA. C V SURYAM
Mob: 9177171123 / 9848180210
Hyderabad
CA. C V SURYAM
(Practising Chartered Accountant)
(865 Points)
Replied 17 November 2011
As there are no explicit provisions under the FA, 1994 i.r.o AMC contracts, we may take the shelter under N. No.12/2003-ST according to which the value of materials on which VAT/WCT was paid can be excluded from gross amount and balance representing value of service on which service tax can be paid @ 10.3%. The abatement being followed presently by you is as per VAT but not as per ST which will lead to complications. Hence, best recourse is N. No.12/2003-ST.
CA. C V SURYAM
Mob: 9177171123 / 9848180210
Hyderabad
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 17 November 2011
The service falls under " Management , Maintenance and repair." There is no specific abatement for this service. Howver, benefit of notification no.12/2003 can be taken . ie value of goods sold in the course of providing service can be excluded provided you have support documents to prove trhis.
abhishek
(Service)
(66 Points)
Replied 18 November 2011
thanks a lot for the replies which helped me lot but since i am charging serivce tax on 40% and if in contract suppose machine parts replaced in comprehensive contract is upto 30% because machine was not used that frequently then in that case can there be a problem with service tax or you suggest to charge service tax full on 100% contract value or charging servicce tax @ 10.30% on 40% of contract value and sales tax @ 12.5% on 60% contarct value is advisable because i have to convince my customer too.
CAclubindia
