VAT and CST both can be charged in a bill

Queries 4399 views 4 replies

a person is charging CST and Service tax on software purchase where good and services are not sepratly byfurcated in the bill so whether he can charge CST and service tax on same amount in one bill  ?

Replies (4)

As per my view, bifurcation should be given in bill.. He cannot charge both without bifurcation..

If the item is such which is service as per service tax act and goods as per local VAT act then bifurcation is not required. As goods and services would be having the same value.

This is a typical scenario in software industry, basically VAT / CST is chargeable on the goods part i.e. in case of software its the media (CD, DVD etc) and service tax is chargeable on the right to use part as covered by information technology software category. However, as per the industry practice, a bifurcation is provided on the invoice as regard to consideration related to media and license.

When you are purchasing  pre designed sofware from market then only vat will be applicable .If you are asking  vendor to make software accoding to your need(customised software) service tax will be applicable.


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