Registration and levy of vat, service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 October 2013 Dear Expert,
I am an a dealer who purchases Packed TALLY ERP 9 Softwares from a Tally authorised distributer and sells it to retail clients/customers by providing customization and annual subscription services.When I purchase software from my distributer he loads 5 % VAT on the bill and accordingly he issues the Invoice. Until now Tally used to provide/sell the products to small sub dealers which do not have Service Tax registration numbers,however recently Tally made it mandatory for the sub-dealers to get registered for Service Tax.
I had formed my Proprietor Business from June 2009 and since then my turnover has not crossed Rs5-8 lacs. However this year ie FY 2013-2014 it is expected to breach Rs 10 lacs.
How should I deal with the billing part.
1) Should I go for VAT registration and charge VAT to my customers along with Service tax of 12 %?

This year I registered for Service Tax on 01-02-2013 and accordingly I filed a ST3 Return for the Period October - March 2013 even though my turnover did not cross the limit in the last FY ie 2012-2013.
But I had loaded Srvice Tax on all my bills from the date of Registration of Service Tax.
Was it ok if I had not filed the return and claimed an exemption limit for Rs 10 Lacs as it was not crossing Rs 10 Lacs.

2)Should I charge VAT only or Service Tax only for sell of Tally Licences or should I levy both the taxes from the ultimate consumer?

3)In case of rendering services for providing Annual maintenance Contract or for Renewing subscriptions on annual basis, should I load service tax on the bill or I should not charge any tax on the same?
Will that amount to me paying the ultimate liablity of Service tax in my half yearly return of income?

4) I claimed an input credit of Service tax on purchases from Authorized Tally partners. Can I also claim VAT credit because I am making purchases and thereby paying VAT however I am not taking any input credit on VAT for my output services.

Please give me some clarity on this issue.

Please suggest me an appropriate course of action for my business.

Thanking you

Nitesh Parmar

Nitesh Parmar (Expert)
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18 October 2013 If your are selling softwares on commission basis then you are requied to get Service tax registration and if you are selling softwares as a principal then not reqired to take registration.

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