Calculation of Tax on Tax

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lakshman (Querist)

19 October 2010 Dear Sir,

seeking your advise on the below:

we are in hotel industry. We are registered under AP VAT and Service Tax (Mandap Keepers). On Banquet Billing we need to charge VAT and Service Tax also. with regard to this we are seeking your advise on the below:

1) Do we need to calculate Service Tax on VAT also ? and

2) Do we need to calculate VAT on Service Tax?

NITIN SHARMA

NITIN SHARMA (Expert)

19 October 2010 1. YES YOU HAVE TO CALCULATE SERVICE TAX ON WHATEVER AMOUNT YOU RECIVED INCLUDING VAT.
2. NO YOU NEED NOT TO CALCULATE VAT ON SERVICE TAX.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)

19 October 2010 Service tax will be calculated on bill amount inclusive of VAT.

lakshman

lakshman (Querist)

20 October 2010 Dear Sir,

Thank you for revert and please update us under which section/provision/clause the Service Tax to calculate on VAT also.

regards
Laxminarayana
9908674443

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