Annual maintenance contract

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 December 2014 there is a AMC of AC maintenance
Party A raises bill of Rs 35200 (there is no bifurcation of material and labour service)
Party B make payment as (assuming u/s 194c)

Party A = 33493
Tds 35200*1% = 352
service tax
35200*70%=24640
24640*12.36/112.36*50% = 1355

My question is
whether Party B is right in calculating service tax and tds
Whether there should be VAT calculation on 30% value (even if party A is registered and have tin no.)

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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22 December 2014 no vat applicable on service provided.

yes calculation is correct as no tds is applicable on servcie tax portion.

Rupesh Jain

Rupesh Jain (Expert)
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22 December 2014 NO VAT APPLICABLE AND TDS ON BILL AMOUNT

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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22 December 2014 Dear Mr. Sampat as per circular no 1/2014 dated 13th Jan 2014 no TDS required to deducted on Service tax portion therefore TDS should be 1% of RS. 33,845/- (35200-1355) i.e. 338/- only rather than 352

Therefore, the entry will be
Expenses A/c Dr. 35,200/33845
Service tax receivable A/c Dr 0/1,355
to Vendor A/c 34,862
To TDS 338
(the above treatment as eligibility of claim Cenvat Credit of Service Tax)

Further, this transaction may be comes under the definition of work contract under VAT law of the state.

Therefore, for VAT it better for questioner to Read respective state VAT law.

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