Dual Tax clarificaton-KVAT & Service Tax
This query is : Resolved
01 July 2010
Dear Sir,
One of our service provider supplied a software and service for one year support. He invoiced with 10.3% service tax on basic value and collecting Karnataka VAT output tax 5% (which includes basic value and 10.3% service tax amount also). Is both taxes are applicable on single component and 5% WCT is applicable on both basic value and service tax?. Kindly clarify the above issue.
Thanking you in advance.
Suneel
One of our service provider supplied a software and service for one year support. He invoiced with 10.3% service tax on basic value and collecting Karnataka VAT output tax 5% (which includes basic value and 10.3% service tax amount also). Is both taxes are applicable on single component and 5% WCT is applicable on both basic value and service tax?. Kindly clarify the above issue.
Thanking you in advance.
Suneel
CA. B.SRINIVASULU
(Expert)
01 July 2010
Software is treated as a produt therefore under kvat 5% is charged. Further the final price of the product for the first time of sale will be arrived at after adding the service content in it which will suffer service tax. Therefore you have to pay vat on both basic value + service value and service tax.
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